Turning States into Welfare Wards
By Carter Clews
Having effectively seized control of the banks, the auto industry, executive pay grades, and every stone that's turned in the nation's infrastructure, the Obama Administration has now turned its avaricious attention on state's rights. And this may be the most devious and deadly seizure of all.
While most journalists dozed in early December, with visions of sugar plums dancing in their heads, the Obama takeover czars were plotting a way to federalize state budgets by undermining any and all citizen restrictions on deficit spending.
Currently 49 of the 50 states (Vermont being the exception) have legal requirements that the budget be balanced at year's end. Some are constitutional, some are statutory, and some are based upon judicial decisions stemming from constitutional provisions restricting state indebtedness.
Clearly, this type of fiscal restraint is not something that appeals to an administration that has giddily run up a budget deficit four times higher than other in U.S. history. One that now blithely proposes to increase that deficit even further with its massive takeover of the nation's entire health care industry.
In fact, the restraints upon fiscal sanity at the state level offend Obama and his ilk on two levels. First, they utterly disdain the idea that the hoi polloi should exercise any control whatsoever over the government elite. And second, they abhor the fact that states can still limit the amount they spend on the pet projects of the Washington politicians' favorite cronies and top contributors.
Say, public employee unions, for example.
So, in December, the Obama-Reid-Pelosi regime unveiled a scheme to take ultimate control of state spending out of the hands of the various states and the citizens thereof. Quite simply, with the passage of the Commerce, Justice, Science, and Related Agencies Appropriations Act, 2010 (HR 2847), handing the states a $154 billion dole to cover their deficits, they took a major step towards undermining fiscal sanity, and state sovereignty as well.
Should HR 2847 now pass the spendthrift Senate, the balanced budget laws of 49 states will be rendered moot. And the ability of the citizens thereof to control state spending will become little more than laughable.
Lest anyone doubt the true intention of the Obama purse and power grab, he, himself, made it abundantly clear, saying, "Frankly, because state and local governments generally don't have the capacity to engage in deficit spending, some of that obligation falls on the federal government."
So, who really benefits from the new federally-financed state deficit spending paradigm (other, of course, that the power-hungry Washington political elite)? The individual states? Not really. They have gotten along quite well for centuries under the sensible restraints of fiscal responsibility. The citizens thereof? Only if they like the idea of runaway government spending, higher taxes, and politicians laughing in their faces while picking their pockets.
No, the true beneficiaries of the state bailout are public employee unions and their greedy, grasping bosses. They are the ones who feathered Obama's nest when he ran for President. And they now have their hands out for the pay back.
As Michael Barone, respected senior political analyst for the Washington Examiner, recently wrote of the Democrats earlier state bailout largesse:
"The political aim, although Democrats don't say so, was to maintain public-sector jobs -- and the flow of union dues to the public-employee unions that represent almost 40 percent of public-sector workers.
"Those unions in turn have contributed generously to Democrats. Service Employees International Union head Andy Stern, the most frequent nongovernment visitor to the Obama White House, has boasted that his union steered $60 million to Democrats in the 2008 cycle. The total union contribution to Democrats has been estimated at $400 million."
So, there you have it – a "twofer" for the Obama-Reid-Pelosi regime: They get to destroy state sovereignty, while padding the pockets of their union boss benefactors. All at taxpayer expense.
As bad as Big Government's bailouts – and subsequent seizures -- of the banks, the auto industry, and various and sundry other business entities were, they pale in comparison to the federal government's takeover of the state budgetary processes. For the hard left, it is at once a stroke of genius and a coup de gras. Like addled addicts hooked on heroine, the increasingly out-of-control states will likely never return to fiscal sanity. And Washington will have claimed total dominance over yet another welfare ward.
Carter Clews is the Executive Editor of ALG News.