Money madness in Washington has infected the individual states and unions. They all want more money – your money – and the Obama administration wants to give it to them.
The most recent symptom of Washington’s accelerating descent into bankruptcy is the failure of the Democrat controlled congress to vote on a budget. Never since the congressional budget process was created, never in good days or bad, has the House failed to pass a budget – in other words, to set limits on spending.
Just before the 4th of July recess House Democrats avoided a politically disastrous debate on the federal budget. To do so, they voted 215-210 to attach a special document to an emergency war supplement bill, an emergency dutifully endorsed by the White House’s faithful Secretary of Defense Robert Gates. That special document (opposed by all Republicans plus 38 Democrats) “deemed as passed” an invisible $1.12 trillion dollar budget.
What does “deemed as passed” mean? It means that without a proper debate or vote on a budget, the White House and Congress can start spending, borrowing, and taxing for Fiscal Year 2011 without restraint. It means there was no vote on federal entitlements, and no debate on taxes, borrowing, debt or deficits. On top of that federal fiscal failure, debt on the state level is out of control.
Thirty-two states were forced to borrow from the federal government just to pay their current unemployment benefits. The total they now owe for those borrowings is $37.8 billion! The list includes the usual suspects: California ($6.9 billion), Michigan ($3.9 billion), New York ($3.2 billion), Ohio ($2.3 billion) and Florida ($1.6 billion). President Obama’s home state is another example of Democrat money management. This year the Illinois state deficit stands at $12.8 billion, plus unfunded payments of $20 billion due on state bonds, plus an unfunded liability of $77.8 billion for the state government workers’ pension fund. It gets worse.
In January the governors of Massachusetts, New Jersey, New York, Ohio, and Wisconsin—representing another list of 41 deadbeat states—met with the president and congressional leaders to ask for a $1 trillion bailout over the next two years. They were met with sympathetic smiles, even though at last count the national debt has every American man, woman and child owing $42,332.65. The White House and Congress are sympathetic, though, because unionized public employees could be hit hard by future austerity measures—and they are reliable Democrats.
There is little doubt that government employee unions are in a very special category. Nurtured by President Obama and his czars, we saw how nicely the workers unions fared in the GM “bailout” and elsewhere in the last two years. But their payoffs for supporting the Democrat Party pale by comparison to the kind of largess received by state and federal employees.
The reason for that is campaign money. Contributions by union employees and their Political Action Committees (PACs) are uniformly Democrat. The Center for Responsive Politics shows that Democrats have been given more money during this election cycle from public employee unions than Republicans have raised from Wall Street.
For example, the PAC of the American Federation of State, County, and Municipal Employees has donated $10.2 million this cycle—that’s 300% more than PAC spending by Goldman Sachs, JP Morgan, Morgan Stanley, Bank of America, and Wells Fargo, combined. Do you wonder why unions roam unchecked and banks are lumbered with thousands of new regulations?
Then there are teachers unions. Fearing no outcry from Congress or the White House, and ignoring the District of Columbia’s independent chief financial officer (who said the city cannot fund the deal) 4,400 members of the Washington Teachers Union just gave themselves a new contract. They get an immediate pay raise to $74,000 plus 21% salary increases in effect by 2012, and retroactive to 2007! Teachers deemed superior earn up to $150,000 and others get bonuses from $20,000 to $30,000. In contrast, nationally ranked schools in the suburbs froze pay for the last two years and also pass many costs to parents. Comparative ranking data for the District is scarce, but a 2002 report by The Manhattan Institute for Policy Research says: “Florida’s public schools had the lowest overall graduation rate in the nation (55%) followed by Georgia and the District of Columbia.”
It seems that even when paid much less, teachers in neighboring states outshine the Washington Teachers Union.
Which brings us back to states, counties, and cities. What are they doing to remedy their red-ink balance sheets? Cutting costs? Are they spending less, like Greece, Spain, and Germany? No, they are hiring top-dollar lobbyists like John Podesta, President Obama’s former transition director. Local governments and their agencies spent $100 million lobbying Washington since the start of last year. They want to protect salaries and pensions and benefits that are far greater than what other Americans receive, so they are asking for federal funds from a congress that cannot even pass a budget.
At the end of the day, your state, county, city, and union are using your tax money and your union dues to hire former government officials to lobby current government officials in Congress and the White House for more federal money. I bet Speaker Nancy Pelosi believes this merry-go-round is a new ‘stimulus,’ just as she said unemployment checks create jobs.
Of course, your great-grandchildren will be paying for the scam.
Naval Academy graduate and Cold War carrier pilot, Chet Nagle flew in the Cuban Missile Crisis. After a stint as a navy research officer, he joined International Security Affairs as a Pentagon civilian — then came defense and intelligence work, life abroad for 12 years as an agent for the CIA, and extensive time in Iran, Oman, and many other countries. Along the way, he graduated from the Georgetown University Law School and was the founding publisher of a geo-political magazine, The Journal of Defense & Diplomacy, read in over 20 countries and with a circulation of 26,000. At the end of his work in the Middle East, he was awarded the Order of Oman in that allied nation’s victory over communist Yemen; now, he writes and consults. He and his wife Dorothy live in Virginia.