Feeds:
Posts
Comments

Posts Tagged ‘Republicans’

One of the very first “accomplishments” of the new GOP majority in Congress was to approve a piece of corporate welfare to subsidize terrorism insurance for big companies.

But I tried to overlook that development since there were a few modest reforms included with the legislation. After all, you shouldn’t make the perfect the enemy of the good (even if the good, in this case, was rather anemic).

There won’t be any excuse, however, if Republicans move forward with a plan to hike the gas tax and further centralize transportation decisions in Washington.

And that’s exactly what seems to be brewing. Senator Corker of Tennessee (an otherwise generally sensible lawmaker) has put forward a specific plan.

Corker, R-Tenn., is drafting something most conservatives avoid at all costs — a tax bill. The Tennessee senator, along with Sen. Chris Murphy, D-Conn., wants the 18.4-cents per-gallon federal gasoline tax and the 24.4-cents per-gallon federal diesel tax to each increase by 12 cents over the next two years — and then be indexed to inflation.

And there are several other senior GOPers who have expressed sympathy.

“I just think that option is there, it’s clearly one of the options,” said Sen. Inhofe (R-Okla.), new chairman of the Senate Committee on Environment and Public Works. Senate Finance Chairman Orrin Hatch (R-Utah) and Sen. John Thune (R-S.D.), the third-ranking Senate Republican, also said they were open to the possibility of raising the tax.

Wow. This is so bad and so discouraging that I’m not even sure where to start.

So let’s make three observations.

1. Bad character. Every single Republican Senator cited in the two stories has pledged to the people of their states that they will oppose all net tax hikes.

For those of us with old-fashioned views on personal integrity, this is rather troubling.

Other than reminding me why I often have disdain for Republicans, this brings back bad memories of the “Read my lips, no new taxes” fiasco.

2. Bad politics. It is remarkably foolish for Republicans to tarnish and undermine the GOP brand as an anti-tax party.

When the issue is “should there be a tax hike?”, Republicans are more trusted by voters. But if the debate shifts to “Who should pay more tax?”, then the Democrats have an advantage.

So by putting a gas tax increase on the table, these Republicans are saying they want their opponents to have a home-field advantage.

3. Bad policy. Higher gas taxes at the national level are the wrong approach for several reasons.

But rather than reinvent the wheel, let me cite the wise words of my friends Larry Kudlow and Chris Edwards.

Here’s some of what Larry wrote for Townhall.

What can Sen. Bob Corker be thinking? On his first Sunday-news-show appearance of the year, right at the beginning of a new Republican Senate era, does Corker communicate a new GOP message of growth and reform? …Does he talk about rolling back Obamacare or regulations in general?  …No. His first Republican message is: Raise the federal gasoline tax.

He explains why this is a foolish idea.

American consumers and businesses finally get a break with plunging oil and gasoline prices. Main Street finally has something to cheer about. And then Mr. Corker weighs in with a wet-blanket proposal to raise federal gasoline and diesel taxes by 12 cents a gallon over two years from the current 18.4 cents. …Why not lead the way for a complete reform of the Highway Trust Fund, transportation spending and the Federal Highway Administration? …If states like California want to build $100 billion speed trains to nowhere, let them. But people in the rest of the country shouldn’t have to pay for it with gas and diesel taxes. …A quarter of HTF spending today is for non-highway purposes. …Federal rules like Davis-Bacon raise building costs for state and local infrastructure by at least 20 percent. Federal aid breeds cronyism, political connections and bureaucratic power in Washington D.C.

The point about gas taxes being diverted is important. Even if we keep the status quo, we don’t need Washington squandering road money of things such as mass transit or high-speed rail boondoggles.

Larry closes his column with a special plea.

Please, Sen. Corker, with the new Republican Congress in place, don’t turn the GOP into the dumb party.

And here are some excerpts from what Chris wrote for Cato.

He starts by debunking the notion that there is an infrastructure crisis.

…our highways and bridges appear to be improving, not getting more “troubled.” Federal Highway Administration (FHWA) data show that of the nation’s 600,000 bridges, the share that is “structurally deficient” has fallen from 22 percent in 1992 to 10 percent in 2013. The share that is “functionally obsolete” has also fallen. Meanwhile, the surface quality of the interstate highways has steadily improved. A study by Federal Reserve economists examining FHWA data found that “since the mid-1990s, our nation’s interstate highways have become indisputably smoother and less deteriorated.”

But even if we had a growing number of “troubled” and “deficient” bridges and highways, that shouldn’t matter.

As Chris explained in testimony to the Senate Finance Committee, these issues shouldn’t be handled by Washington.

One option would be to reduce spending and downsize the federal role in transportation. That approach would encourage state governments to pursue their own innovative solutions for highways and transit, such as new types of user charges, public-private partnerships, and privatization. Federal aid programs for highways and transit have many shortcomings. Aid redistributes transportation funds between the states in ways that are unfair and inefficient. Aid can get misallocated to low-value projects, and it distorts efficient decisionmaking by state and local governments. Also, federally funded projects are known for mismanagement and cost overruns.

Bingo. Chris is exactly right.

Which is why the right approach to transportation is to repeal the gas tax, not raise it.

As I argued in this debate with former Pennsylvania Governor Ed Rendell, we need to get Washington out of the business of determining state and local transportation issues.

P.S. Here’s an interesting example of “public choice” economics. Ask yourself why the CEO of a car company would endorse a big tax hike on gasoline. I give my answer in this discussion with Judge Napolitano.

P.P.S. Don’t forget that the politicians in Washington also are considering a tax on miles driven, so they’d be able to squeeze more money out of motorists even if they have fuel-efficient vehicles.

P.P.P.S. Just in case you’re tempted to acquiesce to more power and money for Washington, never forget the lesson of this poster.

Read Full Post »

Four years ago, I put together some New Year’s Day Resolutions for the GOP.

Three years ago, I made some policy predictions for the new year.

But since I obviously don’t control Republicans and since I freely admit that economists are lousy forecasters, let’s do something more practical to start 2015.

Let’s simply look at three very important things that may happen this year and what they might mean.

1. Will the Republican Senate support genuine entitlement reform?

One of the best things to happen in recent years is that House Republicans embraced genuine entitlement reform. For the past four years, they have approved budget resolutions that assumed well-designed structural changes to both Medicare and Medicaid.

There were no real changes in policy, of course, because the Senate was controlled by Harry Reid. And I’m not expecting any meaningful reforms in 2015 or 2016 because Obama has a veto pen.

But if the Republican-controlled Senate later this year approves a budget resolution with the right kind of Medicare and Medicaid reform, that would send a very positive signal.

It would mean that they are willing to explicitly embrace the types of policies that are desperately needed to avert long-run fiscal crisis in America.

I don’t even care if the House and Senate have a conference committee and proceed with actual legislation. As I noted above, Obama would use his veto pen to block anything good from becoming law anyhow.

My bottom line is simple. If GOPers in both the House and Senate officially embrace the right kind of entitlement reform, then all that’s needed is a decent President after the 2016 elections (which, of course, presents an entirely different challenge).

2. Will there be another fiscal crisis in Greece (and perhaps elsewhere in Europe)?

The European fiscal crisis has not gone away. Yes, a few governments have actually been forced to cut spending, but they’ve also raised taxes and hindered the ability of the private sector to generate economic recovery.

And the spending cuts in most cases haven’t been sufficient to balance budgets, so debt continues to grow (in some cases, there have been dramatic increases in general government net liabilities).

Sounds like a recipe for further crisis, right? Yes and no.

Yes, there should be more crisis because debt levels today are higher than they were five years ago. But no, there hasn’t been more crisis because direct bailouts (by the IMF) and indirect bailouts (by the ECB) have propped up the fiscal regimes of various European nations.

At some point, though, won’t this house of cards collapse? Perhaps triggered by election victories for anti-establishment parties (such as Syriza in Greece or Podemos in Spain)?

While I’m leery of making predictions, at some point I assume there will be an implosion.

What happens after that will be very interesting. Will it trigger bad policies, such as centralized, European-wide fiscal decision-making? Or departures from the euro, which would enable nations to replace misguided debt-financed government spending with misguided monetary policy-financed government spending?

Or might turmoil lead to good policy, which both politicians and voters sobering up and realizing that there must be limits on the overall burden of government spending?

3. If the Supreme Court rules correctly in King v. Burwell, will federal and state lawmakers react correctly?

The Supreme Court has agreed to decide a very important case about whether Obamacare subsidies are available to people who get policies from a federal exchange.

Since the law explicitly states that subsidies are only available through state exchanges (as one of the law’s designers openly admitted), it seems like this should be a slam-dunk decision.

But given what happened back in 2012, when Chief Justice Roberts put politics above the Constitution, it’s anybody’s guess what will happen with King v Burwell.

Just for the sake of argument, however, let’s assume the Supreme Court decides the case correctly. That would mean a quick end to Obamacare subsidies in the dozens of states that refused to set up exchanges.

Sounds like a victory, right?

I surely hope so, but I’m worried that politicians in Washington might then decide to amend the law to officially extend subsidies to policies purchased through a federal exchange. Or politicians in state capitals may decide to set up exchanges so that their citizens can stay attached to the public teat.

In other words, a proper decision by the Supreme Court would only be a good outcome if national and state lawmakers used it as a springboard to push for repeal of the remaining parts of Obamacare.

If, on the other hand, a good decision leads to bad changes, then there will be zero progress. Indeed, it would be a big psychological defeat since it would represent a triumph of handouts over reform.

I guess I’m vaguely optimistic that good things will happen simply because we’ve already seen lots of states turn down “free” federal money to expand Medicaid.

P.S. Let’s close with some unexpected praise for Thomas Piketty. I’m generally not a fan of Monsieur Piketty since his policies would cripple growth (hurting poor people, along with everyone else).

But let’s now look at what France 24 is reporting.

France’s influential economist Thomas Piketty, author of “Capital in the 21st Century”, on Thursday refused to accept the country’s highest award, the Legion d’honneur… “I refuse this nomination because I do not think it is the government’s role to decide who is honourable,” Piketty told AFP.

It’s quite possible, perhaps even likely, that Piketty is merely posturing. But I heartily applaud his statement about the role of government.

Just as I applauded President Hollande when he did something right, even if it was only for political reasons.

But let’s not lose sight of the fact that Piketty is still a crank. His supposedly path-breaking research is based on a theory that is so nonsensical that it has the support of only about 3 percent of economists.

Read Full Post »

I periodically try to explain that there’s a big difference between being pro-market and pro-business.

Simply stated, policy makers shouldn’t try to penalize businesses with taxes, mandates, and regulations.

But neither should politicians seek to subsidize businesses. That’s why I’m against bailouts, subsidies, and other distortions that provide special favors for politically connected companies.

I have nothing against companies earning money, to be sure, but I want them to earn their profits in the marketplace rather than lining their pockets by using the coercive power of government to rig the rules of the game.

But I don’t just have disdain for companies that stick their snouts in the public trough. I also have little regard for the politicians that enable this sordid type of business by trading campaign cash for corporate welfare.

I realize that’s a strong assertion, but I can’t think of any legitimate reason to support handouts for big companies. And I get especially angry when giveaways are facilitated by politicians who claim to support free markets.

Let’s look at two examples, the Export-Import Bank and the Obamacare bailout for big insurance corporations.

I’ve previously argued that the Export-Import Bank is a squalid example of corruption and I’ve shared a video that explains why it’s economically foolish to subsidize a handful of big exporters.

To augment those arguments, here’s some of what Professor Jeffrey Dorfman of the University Georgia recently wrote in a column for Real Clear Markets. He correctly warns that certain GOP politicians are to blame if the Export-Import Bank stays alive.

The Export-Import Bank is everything that Republicans should stand against. It is crony capitalism at its worst. It is corporate welfare, taxing American families to boost corporate profits. It ever forces firms to potentially subsidize a competitor. There is simply no need for this government agency. Republicans in Congress should make a stand and show voters that Republicans believe in free markets and small government, even if some big businesses complain. The Ex-Im Bank should not be reauthorized. …Over the last decade or so, the Democrats have increasingly become the party of big business, stealing that crown away from Republicans because of the Democrats’ willingness to engage in crony capitalism and actively pick winners and losers in our economy. While Republicans are still thought of as the pro-business party, and other actions by the Democrats are clearly anti-business (Obamacare, environmental over-regulation), large multinational corporations like Boeing and GE have donated money to Democrats and generally profited from their political alliances with them. If Republicans want to make gains among (lower) middle-class voters, one of the things that could help is to convince voters that they are on the side of the people and not big corporations. The Ex-Im Bank reauthorization is a perfect opportunity to do just that. …Income redistribution is wrong especially when the money is going to big and profitable companies.

Ryan Ellis of Americans for Tax Reform agrees. Writing for Forbes, he looks at both the policy and politics of Export-Import Bank handouts.

The ExIm bank is an export subsidy program, giving money to certain companies…in the hopes that gives them a leg up in international trade.  It’s been criticized for decades by free traders and those who simply oppose corporate welfare spending out of Washington. …the ExIm bank will sunset on its own on September 30th.  All Congress has to do is let nature take its course, and this corporate welfare program simply goes away forever.

Sounds like we should have a guaranteed victory from free markets over intervention, right?

Don’t count your chickens before they hatch.  Ryan explains that Republicans may shoot themselves in the foot by trying to rescue this reprehensible example of cronyism.

Charging in at the last minute to save ExIm only makes the House GOP look beholden to K Street.  It also looks like they are flip-flopping from where they were back in the summer.  …ExIm reauthorization…is likely to take a GOP grassroots focused on President Obama’s failures and full of midterm election intensity, and turn them inward toward criticism of the House GOP leadership instead. If things go badly with this CR gambit, the House GOP will have given themselves a self inflicted wound just as they are trying to get out of town and not screw up what should be a good year for their candidates.

How nauseating.

I realize that the Export-Import Bank is a relatively minor issue and that I should mostly care about whether politicians do the right think on big topics such as entitlement reform. After all, that’s what really counts if we want to avoid fiscal catastrophe.

But I can’t stop myself from foaming at the mouth when self-proclaimed supporters of free markets undermine the argument for economic liberty with cronyist deals.

Obamacare is another example of big business being against free markets. We already know that the big pharmaceutical firms cut a special deal with the Obama White House.

The big insurance companies also had their snouts in the trough. Not only did they get legislation that mandated the purchase of their products, but they also got language that provides bailouts if they aren’t able to profit from Obamacare.

What’s really amazing, though, is that some Republicans are willing to go along with Obamacare bailouts for those major companies.

The good news is that Florida Senator Marco Rubio is in the right side. Here’s some of what he wrote about bailouts for health insurance companies for Fox News.

 …section 1342 of the ObamaCare law…established so-called “risk corridors”. According to this provision, taxpayers will make up the difference for health insurance companies whose plans lose money under ObamaCare. Last November, as it became clearer what this section of the law actually meant, I introduced legislation repealing it and protecting taxpayers from being forced to cover insurers’ ObamaCare losses. …In recent weeks, the public has learned that senior White House officials have been working closely with insurers behind the scenes to make sure that their earlier bailout deal, which helped assure ObamaCare’s passage in 2010, would stand and that a taxpayer-funded bailout was still, in fact, on the table. …On this ObamaCare bailout, as with so many issues, Washington politicians are misleading average Americans and planning to stick them with the bill. This is government favoritism and corporate cronyism at its worst. …It’s time to repeal and replace it, but at the very least, we should make it the law of the land that health insurers won’t be bailed out by taxpayers.

I’ll also add a moral argument.

As far as I’m concerned, I want the health insurance companies to suffer major losses. I want the business community to see that it’s a mistake to get in bed with big government.

Though I guess I’m actually making a practical argument. I may be motivated by morality, but the companies hopefully will do a cost-benefit analysis and decide that it’s too risky to strike deals with the political class.

By the way, Republicans often do the wrong thing because they’re afraid that voters favor the statist agenda of dependency.

But that’s not the case for Obamacare bailouts for health insurances companies. Here’s some polling data on the issue that showed up on my Twitter feed.

Let’s close by sharing some of what the editors at National Review wrote about both the Obamacare bailout and Export-Import Bank subsidies.

Congressional Republicans keep saying they oppose Obamacare. Yet they’re refusing to take the simplest and easiest action against it. …Some Republicans say that the insurance companies should not be penalized for the defects of the law. Why not? They have freely chosen to participate in the exchanges, and they should bear the risks of that decision — which include the risk that Congress might decide not to shovel tax dollars at them. The alternative, after all, is to punish taxpayers. …The debate over the Export-Import Bank is one test of Republican sincerity about ending corporate welfare. These taxpayer subsidies are another: If Republicans can’t take on corporate welfare when doing so advances one of their party’s most popular and basic commitments, when will they?

Amen. Both of these issues are tests for the GOP.

Actually, they should get added to a long list of issues that tell us whether Republicans have any sincerity (or brains) in the fight against statism.

o No tax increases, since more money for Washington will encourage a bigger burden of government and undermine prosperity.

o To stop bailouts for Europe’s decrepit welfare states, no more money for the International Monetary Fund.

o Reform the biased number-crunching methodology at the Congressional Budget Office and Joint Committee on Taxation.

o No more money from American taxpayers to subsidize the left-wing bureaucrats at the Paris-based Organization for Economic Cooperation and Development.

P.S. If you’re in the mood for some dark humor, here’s the federal government’s satirical bailout application form.

Read Full Post »

If you like to go along to get along, I suggest you don’t become a libertarian. At least not if you follow politics or work in Washington.

Otherwise, you’re doomed to a life of endlessly pointing out that the emperor has no clothes. Here are three examples.

1. When almost every Republican and Democrat argued for a Keynesian-style stimulus in 2008, libertarians had the lonely job of explaining that you don’t get more growth by increasing the burden of government spending.

2. And when most Republicans and Democrats said we needed a TARP bailout that same year, it was libertarians who futilely argued that the “FDIC-resolution” approach was a far more sensible way of dealing with the government-created crisis.

3. More recently, there were a bunch of stories complaining that 2013 was a very unproductive year for Congress, and libertarians were among the few to state that we’re better off with fewer laws rather than more laws.

The same is true for “bipartisanship.” Almost every pundit, politician, and lobbyist in Washington will extol the virtues of bipartisanship. But what they really mean is that they want both Republicans and Democrats to join arms in a business-as-usual game.

Indeed, the standard libertarian joke is that you get bipartisanship when the Stupid Party and the Evil Party both agree on something. Needless to say, that often means laws that are both stupid and evil.

Which is a good description of Bush’s 2008 stimulus and the corrupt TARP legislation.

But since we’re at the end of the year, I don’t want to get overly depressed. So let’s share some cartoons that celebrate the Murray-Ryan budget, which is the most recent example of “bipartisanship.”

We’ll start with ones that have a Christmas theme.

The politicians were glad to escape the fiscal constraint of sequestration, but Lisa Benson is not overly impressed by their cooperative effort.

Budget Deal Cartoon 8

Gary Varvel isn’t very happy, either.

Budget Deal Cartoon 1

Varvel is very explicit in this cartoon about Democrats and Republicans being united against taxpayers.

Budget Deal Cartoon 4

The bag should have been labelled “spending,” but that’s a minor complaint.

Steve Breen points out that the budget deal achieved three out of four goals.

Budget Deal Cartoon 2

And Michael Ramirez astutely identifies too much spending as the problem and shows that the budget deal did nothing to address that issue.

Budget Deal Cartoon 3

Here’s another Lisa Benson cartoon, though this one focuses on establishment GOPers trying to hook the Tea Party on the demon rum of big government.

Budget Deal Cartoon 5

Sort of reminds me of this great Henry Payne cartoon about Obama and Greece. Or maybe this Nate Beeler cartoon about weak-willed GOPers.

I’ve saved the best for last.

This Glenn McCoy cartoon shows what bipartisanship really means inside the DC beltway.

Budget Deal Cartoon 6

McCoy had another cartoon last year with a similar theme, as did Michael Ramirez.

In closing, I want to say something vaguely optimistic. The Murray-Ryan budget deal was unfortunate, but it was a rather minor setback compared to the kinds of “bipartisan” big-government schemes we got during the Bush years.

It was sort of akin to the fiscal cliff deal at the beginning of the year. Government got a bit bigger and a bit more expensive, but it was peanuts compared to TARP, the prescription drug entitlement, and many of the other schemes that eroded economic liberty last decade.

P.S. Fairness requires that I point out that bipartisanship doesn’t automatically mean bad legislation. The bipartisan 1997 budget deal between the GOP Congress and Bill Clinton cut some taxes and reduced the growth of federal spending. And the successful sequester came about because of the bipartisan 2011 debt limit legislation.

Read Full Post »

There’s a saying in the sports world about how last-minute comebacks are examples of “snatching victory from the jaws of defeat.”

I don’t like that phrase because it reminds me of the painful way my beloved Georgia Bulldogs were defeated a couple of weeks ago by Auburn.

But I also don’t like the saying because it describes what Obama and other advocates of big government must be thinking now that Republicans apparently are about to do the opposite and “snatch defeat from the jaws of victory.”

More specifically, the GOP appears willing to give away the sequester’s real and meaningful spending restraint and replace that fiscal discipline with a package of gimmicks and new revenues.

I warned last month that something bad might happen to the sequester, but even a pessimist like me didn’t envision such a big defeat for fiscal responsibility.

You may be thinking to yourself that even the “stupid party” couldn’t be foolish enough to save Obama from his biggest defeat, but check out these excerpts from a Wall Street Journal report.

Sen. Patty Murray (D., Wash.) and Rep. Paul Ryan (R., Wis.), chief negotiators for their parties, are closing in on a deal… At issue are efforts to craft a compromise that would ease across-the-board spending cuts due to take effect in January, known as the sequester, and replace them with a mix of increased fees and cuts in mandatory spending programs.

But the supposed cuts wouldn’t include any genuine entitlement reform. And there would be back-door tax hikes.

Officials familiar with the talks say negotiators are stitching together a package of offsets to the planned sequester cuts that would include none of the major cuts in Medicare or other entitlement programs that Mr. Ryan has wanted… Instead, it would include more targeted and arcane measures, such as increased fees for airport-security and federal guarantees of private pensions.

But the package may get even worse before the ink is dry.

Democrats on Thursday stepped up their demands in advance of the closing days of negotiations between Ms. Murray and Mr. Ryan. House Democratic Leader Nancy Pelosi (D., Calif.) brought a fresh demand to the table by saying she wouldn’t support any budget deal unless in included or was accompanied by an agreement to renew expanded unemployment benefits that expire before the end of the year—which would be a major threat to any deal.

Gee, wouldn’t that be wonderful. Not only may GOPers surrender the sequester and acquiesce to some tax hikes, but they might also condemn unemployed people to further joblessness and despair.

That’s even worse than the part of the plan that would increase taxes on airline travel to further subsidize the Keystone Cops of the TSA.

But look at the bright side…at least for DC insiders. If the sequester is gutted, that will be a big victory for lobbyists. That means they’ll get larger bonuses, which means their kids will have even more presents under the Christmas tree.

As for the rest of the nation? Well, you can’t make an omelet without scrambling a few eggs.

P.S. I suppose we should consider ourselves lucky that this looming agreement isn’t as bad as some past budget deals, such as the read-my-lips fiasco of 1990.

Read Full Post »

I’m glad I work for a principled and libertarian organization. At the Cato Institute, there’s never any pressure to say or do the wrong thing for partisan reasons.

When Republicans screw up, I don’t have to think twice about exposing their misdeeds.

I have repeatedly criticized President Bush (and his former top aide) for expanding the burden of government. Buying votes with other people’s money isn’t compassionate.

Incurable spendaholics?

I have excoriated former GOP Hill staffers who became lobbyists for various special interests groups looking to fleece taxpayers. Stealing is wrong, even when you get a lot of money to use government as middleman.

I have slammed a former Reagan Administration official for defending earmarks. I think it is morally offensive that he gets rich by facilitating the transfer of money from taxpayers to powerful interest groups.

I have condemned the former Senate Republican leader for defending Obamacare. I think it is disgusting that he puts his lobbying income ahead of America’s best interests.

I have denounced Illinois Republican legislators for killing school choice. I think it is downright nauseating that they condemn inner-city children to terrible schools in exchange for campaign contributions from teacher unions.

And I have pointed out that statist policies don’t become acceptable merely because they come from Republican presidential candidates. The road to serfdom oftentimes is bipartisan.

We now have another candidate for our “Republican Hall of Shame.” The governor of Ohio, John Kasich, is embracing Obamacare. Moreover, not only does he want bad healthcare policy, but he’s using third-world tactics and making morally reprehensible arguments.

The Wall Street Journal savages Kasich in a stinging editorial. Here’s a key excerpt that explains the overall situation.

…there are still a few disciples with faith in an ObamaCare higher power, and one of them happens to run Ohio. Governor John Kasich is so fervent a believer that he is even abusing his executive power to join the Affordable Care Act’s Medicaid expansion. Not to be sacrilegious, but the Republican used to know better. Now Mr. Kasich seems to view signing up for this part of ObamaCare as an act of Christian charity and has literally all but claimed that God told him to do so.

But Gov. Kasich has a slight problem. The legislature hasn’t approved this budget-busting part of Obamacare. So Kasich has decided that he can arbitrarily change policy, just like Obama did with the employer mandate and the Obamacare exemption for Capitol Hill.

The problem is that his evangelizing failed to convert the Ohio legislature, which is run by Republicans who understand the brutal budget and regulatory realities of participating in new Medicaid. So Mr. Kasich simply decided to cut out Ohio’s elected representatives and expand Medicaid by himself. …he appealed to an obscure seven-member state panel called the Controlling Board, which oversees certain state capital expenditures and can receive or make grants. …Mr. Kasich asked the panel to approve $2.56 billion in federal funding, and then he’ll lift eligibility levels via executive fiat. It’s a gambit worthy of President Obama, who also asserts unilateral powers to suspend laws that displease him and bypass Congress.

But what’s really nauseating is that Kasich equates big government and welfare spending with religious values.

Mr. Kasich really must feel like he’s guided by the Holy Spirit… “When you die and get to the meeting with St. Peter, he’s probably not going to ask you much about what you did about keeping government small. But he is going to ask you what you did for the poor,” to quote one of his favorite lines.

I suppose I could make a joke about communists presumably being super religious if you use this twisted metric, but there’s a serious point to be made. I’m not a religious scholar, but I wrote several years ago that, “Doesn’t Christianity (and, I assume, Judaism and other faiths) require individuals – using free will – to act charitably? Using the coercive power of government to forcibly redistribute other people’s money, by contrast, is moral preening at best.”

Moreover, Kasich must be delusional if he thinks making government bigger is good for the poor. Redistribution traps the poor in dependency and a larger public sector hinders economic growth, making life even more difficult for the less fortunate.

Heck, just compare Hong Kong and Argentina over the past 50-plus years and ask yourself which jurisdiction afforded more opportunity for those trying to climb the economic ladder.

Fortunately, the battle isn’t over yet.

Thirty-nine House Republicans signed a formal protest and some of them are threatening to sue, and well they should. They argue that circumventing the legislature subverts the Ohio constitution’s separation of powers and exceeds the statutory legal authorities of the Controlling Board, which is supposed to “take no action which does not carry out the legislative intent of the General Assembly.”

I don’t know whether a legal case will be successful, but I can share data showing that Ohio already is in deep fiscal trouble.

It ranks 39th in the Tax Foundation’s State Business Tax Climate Index.

It was the 7th-worst state on controlling spending over the past decade.

It ranks in the bottom 10 on measures of bureaucrats to teachers.

It was listed as one of America’s 11 states facing an economic death spiral.

And John “Barack” Kasich thinks he’ll make Ohio better by adding an additional layer of government spending to finance Obamacare expansion?!?

What makes this situation so sad is that Kasich was Chairman of the House Budget Committee in the mid-1990s, so he deserves some of the credit for restraining federal spending during that period, a very successful policy that led to better economic performance and budget surpluses.

P.S. Kasich’s push to expand Medicaid shows one of the reasons the program should be reformed. He’s being lured by the promise that Washington will pick up the entire tab for the first few years. Afterwards, state taxpayers will get saddled with some of the burden, but Kasich probably assumes he won’t be around to deal with that problem. This is why the entire program should be block-granted to the states. If Kasich really thinks God wants a bigger Medicaid system, he should go to Ohio voters and ask them to pay for it.

Read Full Post »

I sometimes make fun of Republicans for being the “Stupid Party,” but I get genuinely agitated when they’re the “Statist Party.”

You can forgive someone for not being intelligent, after all, but it’s much harder to look the other way when they deliberately and knowingly do the wrong thing.

And that seems to be a good description of how the GOP handled the recent farm bill.

Farm subsidiesFirst, some background. The farm bill traditionally has also been the legislation that funded food stamps. The special interests adopted this approach because it created an unholy alliance of big-city Democrats and farm-state Republicans, with both groups agreeing to support each other’s wasteful spending.

Advocates of smaller government have long objected to this arrangement for the simple reason that neither agriculture subsidies nor food subsidies are proper functions of the federal government.

So it seemed like good news when the House of Representatives defeated a $1 trillion farm bill last month. And it seemed like even better news when House GOP leaders announced that they would separate the farm subsidies and food stamps into separate pieces of legislation.

But here’s where we run into problems. The insiders and special interests who are cozy with the GOP used this new approach as an excuse to increase the role of the federal government!

I’m not joking. Darren Bakst of the Heritage Foundation explains what happened.

When the House leadership first announced it would separately consider the food stamp and farm components of the “farm” bill, it looked like they got the message that current farm policy was in dire need of reform. With separation, real reform to rein in market-distorting programs and special interest handouts could finally happen. But now that separation has occurred, they’ve forgotten the very reason why separation was needed in the first place. …With the passage of this bill, the House has gone even further to the left than the Senate bill. It would spend more money than Obama on the largest farm program, crop insurance. …In fact, they made this new bill even worse—by making sneaky changes to the bill text so that some of the costliest and most indefensible programs no longer expire after five years, but live on indefinitely. This means the sugar program that drives up food prices will be harder to change, because it doesn’t automatically expire. It also means the new and radical shallow loss program that covers even minor losses for farmers will indefinitely be a part of the law.

To be fair, there were a few changes that arguably moved the ball in the right direction.

Here’s what the Wall Street Journal opined.

The new farm bill still has more subsidies than is desirable, especially amid a booming agriculture economy and record land prices. The supports for prospering sugar and dairy farmers are especially dreary. Republicans defeated a proposal by Budget Chairman Paul Ryan to put income limits for receiving subsidies, so “farmers” with non-farm incomes of nearly $1 million a year can still dun taxpayers. But at least the bill spends $20 billion less over 10 years than current law. One major reform is the repeal of a 1949 law that reinstates New Deal-era production controls and price supports if Congress failed to pass a new bill.

I’m not an expert on agriculture subsidies, but I think the Heritage Foundation has a stronger argument. In any event, it’s unambiguously true that House Republicans didn’t use this opportunity to approve big, pro-market reforms.

Moreover, the Republicans have left themselves wide open to the charge that they’re perfectly happy to subsidize rich contributors while not subsidizing those with modest incomes.

Ross Douthat was very critical of the GOP ploy in his New York Times column.

It should go without saying that America’s agriculture policy has always been a terrible, stupid, counterproductive exercise in self-dealing cronyism. But when House Republicans severed the traditional connection, arbitrary but politically effective, between farm subsidies and food stamps, it briefly seemed like they were looking for an opportunity to put libertarian populist principle into practice, by separating both outlays in order to trim or reform both separately. But no — instead they were just making it easier for the party’s congressmen to vote for a bloated, awful big government program that benefits mostly-Republican states and interest groups, knowing that they weren’t also voting for something that pays out to the (mostly-Democratic) poor as well. This is egregious whatever you think of the food stamp program… Practically any conception of the common good, libertarian or communitarian or anywhere in between, would produce better policy than a factionally-driven approach of further subsidizing the rich.

Sort of confirms my argument that the worst people in Washington are GOP insiders.

Needless to say, this approach creates a big opening for the left, as illustrated by this cartoon.

Big Ag GOP

But the reason this cartoon is effective is that it is based on reality. Republicans did push through a wasteful farm bill. And they don’t have any plans to deal with the food stamp component.

And even though there will be some agreement on food stamps, the GOP has left itself open to the charge that they want handouts for their rich friends and nothing for the poor.

From a libertarian perspective, I don’t care if Republicans open themselves up to unflattering stereotypes.

But I do want to abolish the Department of Agriculture at some point. And I also want to clean up the cesspool of corruption in Washington by shrinking the size and scope of the federal government.

Unfortunately, we seem to be moving in the wrong direction and the farm bill is merely the latest example of a very bad trend.

Read Full Post »

Older Posts »

Follow

Get every new post delivered to your Inbox.

Join 2,678 other followers

%d bloggers like this: