On April 18, Connecticut Business And Industries Association (CBIA) threw
its best punch, a stunning article and accompanying graph titled “State Spending: Time to Change Direction.”
It should be noted that CBIA, an association of business groups in the
state, is not a part of the right wing conspiracy to save Connecticut from left
wing pirates. The association wears a velvet glove and speaks to legislators,
mostly left of center Democrats, in muted excessively polite tones.
The General
Assembly put a constitutional cap on spending to induce doubtful legislators to
vote in favor of establishing an income tax. Since then, the cap has been steadily
lifted. It sometimes sits uneasily on the skulls of spendthrift legislators but
is regularly doffed whenever Democrats in the General Assembly determine that
it would be inadvisable to cut spending.
And here we go again. In mid-April the Democrat dominated Appropriations
Committee approved legislation that would exempt certain types of state
spending from being counted against the cap. Excluded from the cap would be any
spending for which the state may be reimbursed by the federal government and
payments made by the state on unfunded liabilities for state employee and
teacher retirements – a substantial piece of change. The adjustments, said
House Speaker Brendan Sharkey, would allow the state to spend more money on
Medicaid, which has been expanded to accommodate millions of previously
uninsured people. The benefits of Obamacare were frontloaded so as to encourage
dubious U.S. Congressmen to vote for it. Payments were back loaded, and
payments on Mr. Obama’s Health Care overhaul behemoth are now coming due.
Speaker of the House Sharkey -- a considerable improvement over his
predecessor who, unlike Mr. Sharkey, had no direct business experience – has
said he doubts that taxpayers in Connecticut would be willing to leave their
dollars in Washington: “…if we do not make common sense changes to the definition of the
spending cap, that’s exactly what we’re going to do.” Sometime in the future, assuming
Connecticut has a future, the state hopes to be reimbursed for its present
costs by a federal government struggling to balance its own books, which are
about $17 trillion in arrears. Accounting for unfunded liabilities, total US
obligations amount to about $87 trillion.
Under a constitutional cap, there are two ways to expand spending: 1)
raise the cap through a constitutional change, an unpromising strategy because any
attempt to raise the cap, if put to a popular vote, likely will be defeated, or
2) move spending outside the cap, a more practical measure that may not be
noticed by a general public focused on its own budget shortfalls.
Democrats in the General Assembly have the votes to adjust the definition
of “spending” so that a large chuck of change will be removed from the
constitutional cap. The Orwellian redefinition then will allow state Democrats
to increase net spending in the hope that a national government unable to cover
its own expenses will in the future reimburse costs incurred by the states.
From what larder it may be asked? That indeed is the $87 trillion dollar
question. After directing states to expand
eligibility or risk forgoing all of
their federal Medicaid dollars, the Obama administration hit a Supreme Court
decision wall. Ruling on behalf of
26 state plaintiffs, the high court found the “all-or-nothing” proposition was
coercive. To bring Obamacare within the shelter of the U.S. Constitution, the
Court in essence made the Medicaid expansion optional -- meaning that a state
could reject the Medicaid expansion and
not lose its existing Medicaid funding.
In the absence
of coerced payments, 21 states have chosen to opt out of state run insurance
exchanges – which means that fewer states than originally anticipated are participating
in the national exchanges. Medicaid currently consumes more than 23 percent of
state budgets, a budget item larger than that of education. As Medicaid
spending continues to grow, its costs will adversely impact other equally
important priorities such as education, emergency services, transportation, and
criminal justice. When you choose not to reform a program much in need of
reform and decide instead to expand the program, you end up, necessarily, with
a bigger and more intractable problem.
To march
heedlessly forward under such circumstances is a form of mass destruction. Would
it not be less self-destructive to cut spending?
Comments
I used to like it when that now convicted pol from Ohio took to the floor of the House to proclaim, "Beam me up."
http://ctsenaterepublicans.com/2013/04/session-update-state-budget-video/#.UXlvJrWL-n-