Freedom Line Blog

Heather MacDonald of City Journal highlights yet another example of California residents migrating to Texas for greener cash pastures.  (In this case, UC San Diego lost three top cancer researchers to Rice University after the latter offered a 40% increase in compensation.)  Facing a $650 million cut in state funding, the University of California system campuses are shedding faculty and programs, but not, unfortunately, the blizzard of “diversity czars” and their sizable staffs.

UC San Diego is adding diversity fat even as it snuffs out substantive academic programs. In March, the Academic Senate decided that the school would no longer offer a master’s degree in electrical and computer engineering; it also eliminated a master’s program in comparative literature and courses in French, German, Spanish, and English literature. At the same time, the body mandated a new campus-wide diversity requirement for graduation. The cultivation of “a student’s understanding of her or his identity,” as the diversity requirement proposal put it, would focus on “African Americans, Asian Americans, Pacific Islanders, Hispanics, Chicanos, Latinos, Native Americans, or other groups” through the “framework” of “race, ethnicity, gender, religion, sexuality, language, ability/disability, class or age.” Training computer scientists to compete with the growing technical prowess of China and India, apparently, can wait. More pressing is guaranteeing that students graduate from UCSD having fully explored their “identity.” Why study Cervantes, Voltaire, or Goethe when you can contemplate yourself? “Diversity,” it turns out, is simply a code word for narcissism.

MacDonald also highlights how the multi-million dollar diversity industry has embedded itself into plumb positions at UC Berkeley and UCLA.  If UC students are upset about the coming hike in tuition, they should aim their picket lines at the faculty senates and diversity czars whose very existence makes such increases even higher than need be.

Annette Meeks, CEO of the Freedom Foundation of Minnesota, offers this damning editorial of Democratic Governor Mark Dayton’s decision to shut down the state’s government rather than sign a balanced budget without tax increases.

Among the bevy of withering arguments against Dayton’s action, Meeks points out that the budget passed by the legislature actually increased state spending by 6 percent while filling a $5 billion deficit.  The problem for Dayton: no soak-the-rich “millionaires’ tax.”

Like President Barack Obama with the nation’s debt ceiling, Governor Dayton is playing a dangerous game for the sake of fiscal discrimination.  Moreover, Dayton is unwilling to consider the state equivalent of a continuing budget resolution.

I’ll give Meeks the last word:

Last week, Republican legislative leaders, in a desperate move to stave off closing the government, proposed a “lights on” budget resolution that would have allowed services to continue while negotiations continued. In a crass, cynical move, Dayton rejected this good-natured offer.

We are here for one reason — Dayton. He insists upon inflicting as much pain as possible for state residents and government employees. And he is doing this so that the Legislature will bend to his will and raise income taxes, launching Minnesota into the stratosphere of high income taxes.

There are certain principles worth fighting for. Preserving a sound economic future for our state is one of those things.

In February, President Obama unveiled his irresponsible deficit-inflating 2012 proposed budget.  By April, Obama hastily said “never mind,” scrapped that proposal and offered a vague Budget 2.0 speech after Congressman Paul Ryan (R – Wisconsin) embarrassed him by unveiling his debt-cutting budget roadmap.

The problem is that the so-called leader of the Free World was too afraid to offer any specificity whatsoever, focusing on his reelection instead of the nation’s intensifying fiscal emergency.  At a House Budget Committee hearing last week, Rep. Ryan asked Congressional Budget Office (CBO) chief Douglas Elmendorf whether the CBO had yet been able to estimate Obama’s latest “budget.”  Elmendorf’s not-so-subtle reply:

We don’t estimate speeches.  We need much more specificity than was provided in that speech for us to do our analysis.”

Come to think of it, a lot of voters probably think back to the 2008 presidential campaign and say the same thing.

So much for attempt number two on the “Recovery Summer” that the Obama Administration promised one year ago.

Today, the Labor Department announced that weekly initial unemployment claims jumped to 429,000, an increase of 9,000 from last week’s 420,000.  Even more ominously, Federal Reserve Chairman Ben Bernanke explained yesterday that the Fed has already done all it is prepared to do to increase growth, and expressed the same sort of cluelessness as Obama on why their “stimulus” has failed:

We don’t have a precise read on why this slower pace of growth is persisting.”

The Fed also issued “fairly significant” reductions in its 2011 growth forecast to 2.9% next year (down from a 3.3% growth expectation in April, and from 3.9% in January).  Another “Recovery Summer” like this, and Obama will be borrowing Jimmy Carter’s sweater for his own “Malaise Speech.”

Former DNC Chairman Tim Kaine (D-VA) is having to face reality and run from his party in hi quest to be the next U.S. Senator from Virginia.  Kaine, a former governor, agreed during an interview that the Democratic-controlled Senate’s complete failure to pass a budget for over a year is a “major problem” for the party.

It’s also a major problem for candidates like Kaine trying to convince voters that the party of profligate spending, special favors for unions and – yes – crony capitalism – is serious about fiscal matters when it can’t muster the courage to pass a budget.  The failure to pass a budget is to fail at the most basic aspect of governing.  Either Senate Democrats need to get serious about passing a budget – and the debate that goes with it – or they should adjourn until further notice.  At least that would save taxpayers money for keeping a spate of non-working buildings running.

A blog post last Friday by Loren Kaye at Fox and Hounds Daily provides another variation on the theme of California’s broken governing structure.

Two budget-related developments yesterday bring a small amount of clarity to the political positioning on achieving a deal. But their long-term effect is to re-allocate political power.

Controller John Chiang released a legal opinion interpreting the section of Proposition 25 that would halt salary and expense payments to the Legislature if it fails to transmit a budget to the Governor by June 15. His lawyers concluded that even if the budget is timely passed and sent to the Governor, if it is not a balanced budget, then legislators would forfeit their pay until they pass one that is balanced. This twist arises from an earlier measure, Proposition 58 in 2004, which requires that the Legislature may not send to the Governor, nor may the Governor sign, a budget that would spend more than the revenues estimated for the year. Until the Controller’s memo, this constitutional provision had no teeth. Now that provision has been given real force, and the arbiter of whether a budget is balanced – and therefore whether the Legislature will be paid – will be Controller John Chiang.

Within several hours of this disclosure, Senate Pro Tem Darrell Steinberg announced that his SB 653 would be folded into a budget trailer bill. His proposal would provide broad local taxing authority (contingent on existing voter approval requirements) to counties and school districts, which would substantially increase the level of uncertainty surrounding economic development. The significance of including the language into a budget trailer bill is that those bills are granted immunity from referendum, even if passed by a simple majority vote. This was another consequence of Proposition 25 that was warned against, but pooh-poohed by proponents. This maneuver has ramifications that extend well beyond today’s budget controversy, and could presage the demise of the people’s cherished referendum power, 100 years after it was first granted.

The consequences of Proposition 25 on the power dynamics in California government go far beyond just passing the state budget. And we’re only beginning to see their boundaries tested.

So, as of last Friday, California’s Controller claimed the power to determine the state’s budget process.  Maybe next week the state’s Attorney General can find a way to trump him.  After that, why doesn’t the Treasurer figure out how to get in on the fun?  In Golden State government, everyone wants power, but none claim responsibility.

Columnist Michael Barone thinks that House Budget Chairman Paul Ryan (R-WI) may be reconsidering his decision not to run for president in 2012.  How else to explain Ryan’s recent pro-American Exceptionalism foreign policy speech?  Paraphrasing Barone, how often do committee chairmen weigh in on issues outside of their jurisdiction?

Here’s an excerpt from the concluding section of Ryan’s speech:

A more prosperous economy enables us to afford a modernized military that is properly sized for the breadth of the challenges we face. Such a military must also be an efficient and responsible steward of taxpayer dollars in order to maintain the confidence of the American people. The House-passed budget recognizes this, which is why it includes the $78 billion in defense efficiency savings identified by Secretary Gates.

By contrast, President Obama has announced $400 billion in new defense cuts, saying in effect he’ll figure out what those cuts mean for America’s security later. Indiscriminate cuts that are budget-driven and not strategy-driven are dangerous to America and America’s interests in the world. Secretary Gates put it well: “that’s math, not strategy.”

I’ll close on a final thought: Britain’s premature decline was triggered by a crisis of confidence among its political leadership. Once they concluded that they should manage Britain’s decline, it mattered little what Britain was objectively capable of achieving on the world stage. This crisis of self-perception was fatal to Britain’s global leadership.

Today, some in this country relish the idea of America’s retreat from our role in the world. They say that it’s about time for other nations to take over; that we should turn inward; that we should reduce ourselves to membership on a long list of mediocre has-beens.

This view applies moral relativism on a global scale. Western civilization and its founding moral principles might be good for the West, but who are we to suggest that other systems are any worse? – or so the thinking goes.

Instead of heeding these calls to surrender, we must renew our commitment to the idea that America is the greatest force for human freedom the world has ever seen; a country whose devotion to free enterprise has lifted more people out of poverty than any economic system ever designed; and a nation whose best days still lie ahead of us, if we make the necessary choices today.

Thank you.

Thank you, Sir.  Now, how about running for president to see those choices made?

Last week I wrote about California’s prison dilemma: mandatory sentencing laws combined with too few prisons.  So far, the choice has been presented as between less time for criminals or more taxes for the law-abiding.  An update by the Debra Saunders doesn’t paint a prettier picture:

Even law-and-order types understand that the system must be streamlined. Nina Salarno Ashford of Crime Victims United told me, “I understand budget constraints.” For example, parole violators should go to jail – not prison. But Salarno looks at overcrowded jails, which already have had to release inmates, and fears the consequences.

How do you pay for it?

“It is probably going to take taxes,” she answered.

No lie. There is not much point in keeping taxes low – only to have some lowlife boost your wallet.

On the other hand, there’s not much point in paying higher taxes if the state slashes the number of inmates by 40,000.

Now that the United States Supreme Court has demanded California reduce its overcrowded prison population by over 40,000, there may not be enough time to raise taxes and build adequate prison space even if Californians wanted to.

If ever there was a need for statesmanship from California’s executive and legislative leaders, this is it.  Otherwise, when tens of thousands of felons are freed, there will literally be rioting in the streets.

Yesterday, Ezra Klein of the Washington Post listed five hardball questions he’d like to hear answered by President Barack Obama:

1. You have repeatedly lauded the economy of the Clinton years, yet in a time of high and mounting deficits, you want to make most of the Bush tax cuts permanent. Economically speaking, what makes you believe the Clinton-era tax rates are too high?

2. During the 2008 campaign, you pledged never to raise taxes on any families making less than $250,000 a year. The excise tax on high-value health insurance plans, which you supported as part of health-care reform, did raise taxes on families making less than $250,000 a year. If you’re going to raise almost a trillion dollars by cutting and capping expenditures, as your budget proposes, that will also affect families making less than $250,000. When will you admit that fiscal responsibility requires tax increases on families who aren’t rich?

3. Your budget empowers the Independent Payment Advisory Board to push Medicare toward value-based purchasing designs. But it doesn’t empower the board to experiment with benefit design more broadly, or any form of cost sharing. The committee’s powers remain mostly restricted to payment reforms. Why?

4. The main differences between your budget and the Simpson-Bowles report is that your budget raises less in taxes and cuts less in defense spending. Why were those decisions made?

5. You’ve talked frequently about the need to “win the future” through new investments and initiatives. But unlike the budgets proposed by the House Progressives or Andy Stern or EPI, Demos and the Century Foundation, there’s nothing in your budget that specifically commits to any such investments, nor any particular funding source dedicated to them. If these investments are so important, why not build them into your budget? Why accept the framework that this discussion should be entirely about cuts?

The day before, Klein listed eight thoughtful questions to House Budget Committee Chairman Paul Ryan about the latter’s health care reform.

Responses to each set of queries would be greatly beneficial to Americans trying to sort out whether each man’s plan passes the logic and laugh tests.  After hosting several town hall meetings about his budget reforms, Ryan seems eager to go point-by-point.  The president and his entourage; not so much.

An editorial in today’s Stockton Record crystallizes one of the reasons California is facing a $20 billion deficit: it has no master list of state-funded commissions and boards.

Per the Record:

…apparently no one really knows how many are out there although 300 is the number most often cited. A 1989 report by the Little Hoover Commission put it at 400. More recently, the California Performance Review evaluated 339 state boards and commissions. Others have put the number as high as 1,000.

How much they’re costing also is unknown, although getting rid of the 37 panels Brown has targeted would save about $10 million. Admittedly, that’s a drop in the proverbial state budget bucket, but do the math, and if 37 panels are costing us $10 million, what are all of them costing?

And lest anyone think this scandal isn’t bipartisan:

When he swept into office, Gov. Arnold Schwarzenegger vowed to dismantle the forest of boards and commissions that had grown like weeds in state government. That led to the creation of another panel to review government operations.

Among the panel’s findings: “These entities are so scattered and numerous across government that arriving at a firm number is nearly impossible. In our search, there was no single source we could turn to find out which commissions existed and why. In fact, state government has no master list of all boards and commissions and the thousands of political appointees that populate them.”

Incredible.

Indeed.

In a newly released video, House Budget Committee Chairman Paul Ryan discusses why Congress must reform Medicare in order to save it and the dangers of doing nothing.

In a statement that accompanied the video, Rep. Ryan said:

We can no longer let politicians in Washington deny the danger to Medicare – the danger is all too real, and the health of our nation’s seniors is far too important. We have to save Medicare to avoid disruptions in benefits for current seniors, and to strengthen the program for future generations. House Republicans have put forward a plan to do just that. Democratic leaders in Congress have failed to produce a plan – it has been 755 days since Senate Democrats even passed a budget. Meanwhile, the President’s plan would empower a panel of 15 unelected bureaucrats to cut Medicare for current seniors, while failing to save the program for future retirees.

“This video lays out the clear choice our nation faces on Medicare: Will Medicare become a program in which a board of bureaucrats manages its bankruptcy by denying care to seniors? Or will leaders work together to save and strengthen Medicare by empowering seniors to choose health care plans that work best for them, with less support for the wealthy and more help for the poor and the sick?  House Republicans have advanced solutions to save Medicare. Instead of working with us, the leaders of the Democratic Party have opted to play politics with the health security of America’s seniors.”

With all the media attention being lavished on governors Mitch Daniels (R-IN) and Scott Walker (R-WI), it’s easy to forget another Midwestern chief executive: Ohio’s John Kasich.

Human Events’ John Gizzi reports that the Ohio governor is bullish on winning a statewide initiative over whether public employees must increase their percentage of health care spending from 9 to 15 percent.  (Compared to the average 23 percent contribution in the private sector.)

Kasich is also preparing legislation with state Republican lawmakers to eventually eliminate Ohio’s income tax.  If these and other reforms are successful, Kasich might start getting the attention his herculean efforts deserve.

During the 1980 presidential campaign, Republican candidate George H. W. Bush decried Ronald Reagan’s supply-side tax cuts as “voodoo economics” because the policy promised to lower tax rates and generate more production, and thus more tax revenues.  Bush’s denunciation of Reagan’s economic vision was a proxy for Keynesian thinkers in both parties, who thought (and think) that tax reductions spur consumption (demand), not production (supply).

Of course, Bush lost to Reagan in the Republican primary that year, in part because Reagan had a more compelling message: let’s cut taxes to get the economy growing instead of cutting them simply to reduce spending.  Moreover, Bush was wrong because Reagan’s policies worked.

This weekend, 2012 presidential candidate Newt Gingrich slammed Rep. Paul Ryan (R-WI) and the latter’s “Path to Prosperity” budget proposal as “right-wing social engineering.”  Why?  Because Gingrich thinks changing the way Medicare operates – from straight government subsidy to vouchers – is too “radical.”

But that isn’t stopping Gingrich from continuing to support an individual mandate to buy health insurance.  (Like fellow contender Mitt Romney (R-MA), but unlike President Barack Obama, Gingrich wants the individual mandate at the state, not federal, level.)  So, in Gingrich’s mind, transforming Medicare from a defined benefit into a defined voucher is “radical,” but mandating individuals to buy health insurance is not?

When Reagan adopted the mantra of economic growth through across-the-board tax cuts in 1980, he gave voters a clear alternative to the shared scarcity narrative being peddled by politicians in both parties.  Ryan’s budget proposal is based on Reagan’s insight that less taxes and more growth sells; less choice and more government mandates do not.

Like Reagan, whoever wins the Republican presidential nomination next year will have to make some accommodation with Ryan’s economic vision.  Downsizing – whether it’s freedom, opportunity, taxes, or spending – isn’t enough of a message to create the kind of majority needed to enact the kind of policy changes that spur real private sector growth.  With positions supporting ethanol subsidies and state level individual mandates, it sounds like Newt Gingrich is more comfortable playing the elder Bush’s role in this campaign.

City Journal has a piece by Pacific Research Institute’s Steve Greenhut praising the California Assembly’s GOP leadership for proposing a series of small fixes that would result in dramatic savings for the state budget:

But much more encouraging is that the Republican plan suggests how simple reforms can save serious dollars. Take the provision of medical care for prison inmates. According to the Assembly GOP’s budget white paper, “The cost of providing health care to state prisoners has been the fastest growing part of the corrections budget. After the [federal] receiver took control of the system in 2006, medical costs skyrocketed. They reached $2.5 billion a year, including mental health care. The cost of health care for each inmate per year in California is approximately $11,600, while prison healthcare costs $5,757 in New York; $4,720 in Florida; $4,418 in Pennsylvania; and $2,920 in Texas. While costs have increased dramatically, it has not improved the quality of care enough to take the system out of federal court receivership.” Under the Republican plan, the state would contract out the correctional health-care system, saving $400 million. But that would mean taking on the powerful California Correctional Peace Officers Association, the prison-guard union that just won an absurdly generous contract from the governor.

Other budget cuts in the Republican blueprint include $3.7 billion from programs related to early childhood, mental health, the poor, and the elderly, as well as $1.1 billion from the state payroll. The plan also includes $2.8 billion in other savings from a bill that has already passed the Assembly but hasn’t become law. It doesn’t go far enough toward addressing the size and scope of California’s government, since the state faces even bigger fiscal problems down the road. But Republicans have made their point: California can fix at least its short-term budget problem if Democrats truly want to.

The Assembly GOP’s white paper on their budget proposal balances the state’s remaining $15 billion budget deficit without raising taxes.  Greenhut points out that although the proposal doesn’t fix the structural issues plaguing California’s chronically dysfunctional governing process, it does show that there are at least a few Republicans able to offer a serious solution to the state’s most troubling problem.

Rasmussen Reports says that 40% of Americans are still undecided on whether to support the “Path to Prosperity” budget plan by Rep. Paul Ryan (R-WI).  CFIF strongly endorses the House Budget Committee Chairman’s attempt to rein in federal spending, while giving Medicare beneficiaries more choices in their health care decisions.

According to the poll, 26% of likely voters support Ryan’s plan, while 34% oppose it.  That leaves 40% who still don’t know enough about Ryan’s proposal to have an opinion.

The liberal media is already waging a misinformation campaign against Ryan and other sensible fiscal conservatives.  For a primer on the “Path to Prosperity” go here.

In order to change the culture in Washington, voters need to change the terms of the debate.  Educating yourself and others on Ryan’s plan gives fiscal conservatives the ammunition they need to win the hearts and minds of the 40% still undecided.

Mark Steyn puts federal spending into yet another helpful perspective:

Under the 2011 budget, every hour of every day the government of the United States spends a fifth of a billion dollars it doesn’t have.

Your (future) tax dollars at work.

Here’s more encouraging news:  Americans are “getting it” on the issue of federal deficits and debt.  According to a new Gallup survey, an overwhelming 73% to 22% majority blames excess spending for the deficit, not insufficient taxation.  Barack Obama and his liberal apologists seek to blame “tax cuts for the rich” and insufficient revenues as the problem.  But as illustrated by the Heritage Foundation’s newly-released 2011 Budget Chart Book, our budget would still be approximately balanced if spending merely returned to early 2000s levels.  Does any serious person contend that government was too small in the first half of the 2000s, that government didn’t spend enough, that the poor and hungry were somehow cast out on the cold streets, that bureaucrats went unpaid?  Of course not.  The problem is explosive spending growth.  Obama oversaw an 84% increase in domestic discretionary spending, including his failed “stimulus,” in just his first two years.

Fortunately, Americans see through his attempt to demand even more taxpayer dollars to feed the insatiable leviathan he hopes to enlarge.

Although the campaign for America’s fiscal survival continues, it is important to recognize battle victories along the way.

CFIF has participated in the effort to stop the duplicative, unnecessary and wasteful second engine for the new F-35 Joint Strike Fighter that refused to die.  Pratt & Whitney was awarded production of the F-35 engine, but forces in Congress perpetuated the wasteful General Electric/Rolls-Royce second engine.  The Pentagon doesn’t want it.  The Senate has voted it down.  The House has voted it down.  The Bush White House sought to stop it.  The Obama White House has sought to stop it.

Unfortunately, the second engine project rambled on at a cost to taxpayers of $1 million per day, because of Beltway pork-barrel political forces and the previous Congress’s failure to even pass a 2011 budget.

But at long last, the Defense Department this week instructed G.E. and Rolls Royce that the second engine contract has been terminated.  This is progress.

Byron York continues sounding a lone alarm over the connection between ballooning welfare spending and shrinking defense budgets.  With the United States largely abstaining from the lethal aspects of NATO’s Libyan adventure, entitlement-heavy countries like Britain and France are running out of missiles.

The reason?  Decades of budget decisions that favored butter over guns.

On a trip to Libya, Senator John McCain (R-AZ) reopens the straight talk express:

“…it’s a sobering fact that many NATO countries, even some of the big ones, are simply weak. They’ve been cutting their defense budgets for years as their welfare state commitments grew bigger and bigger. Now, they can’t mount much of a fight, even by the small-scale standards of the Libyan action. “No one will admit it, but both the British and the French are running out of precision-guided weapons,” says McCain. “They simply do not have the assets.”

Not that this evidence is convincing to modern liberals.  York also points out that members of Congress’ Progressive Caucus recently proposed a “People’s Budget” that raises taxes to expand entitlements like Social Security, Medicare, and Medicaid while “reducing strategic capabilities, conventional forces, procurement, and research & development programs.”

We’ve seen the future, and it’s the near military impotence of Britain and France.  The United States can and must do better.

The Washington Post has a helpful – and short – explanation of the debt ceiling debate, along with some interesting facts.  *My comments in ( )

• Prior to 1917, Congress had to approve borrowing each time it came up (meaning that WWI combined with Progressive Era big spending made raising the debt much easier)

• Members of Congress will most likely wait use July 8^th as the drop-dead date (unfortunately, federal pensioners will see government contributions to their retirement funds halted when the U.S. passes the real deadline on May 16^th)

• The debt ceiling was less than $1 trillion in the 1980s, then $6 trillion in the 1990s; today it stands at $14.6 trillion and rising (and no, simple inflation is not the reason – it’s spending increases)

• The budgets presented by President Barack Obama and Rep. Paul Ryan would both require a raise in the debt ceiling (Obama by $2.2 trillion; Ryan by $1.9 trillion)

Read the entire synopsis here.