“According to Sen. Mitt Romney (R–Utah), America’s current welfare policies have two major flaws: They penalize recipients who get married by reducing the benefits they’re eligible for, and they don’t do enough to help couples afford to have more kids.
“There’s a growing gap between the number of children people say they want to have and the number they actually decide to have,” he said during an event yesterday at the American Enterprise Institute (AEI) in Washington, D.C. “Just to be clear here, I don’t think the goal of policy should be to try to create incentives to have people have more children than they want, but instead should find a way to bridge the gap between what people would like to add to their family and what they’re able to afford.”
Attempting to address these issues, Romney in June released the Family Security Act 2.0, a proposal to send parents monthly checks of between $250 and $700 per child, beginning midway through a pregnancy. A household would need to have earned at least $10,000 the previous year to be eligible for the full benefit, a provision meant to keep families from dropping out of the work force entirely. The program would be “paid for” by reducing or eliminating various existing income tax breaks.
It’s hard to fault efforts to resolve distortions introduced by previous federal policy, including the whoopsie-daisy of incentivizing low-income couples to remain unmarried. The idea that it’s the government’s job to help people have more kids rests on a more debatable assumption—namely, that parents should not have to shoulder the full cost of raising future members of society.
Regardless of whether you buy that “positive externalities” argument, the federal government does spend billions each year on family programs. Given that these efforts are not likely to go away (however much libertarian purists might wish otherwise), it’s worth considering whether Romney’s proposal represents at least an incremental improvement over the status quo.”
“Hospitals across the country are grappling with widespread staffing shortages, complicating preparations for a potential Covid-19 surge as the BA.5 subvariant drives up cases, hospital admissions and deaths.
Long-standing problems, worker burnout and staff turnover have grown worse as Covid-19 waves have hit health care workers again and again — and as more employees fall sick with Covid-19 themselves.”
“The current legislation has swelled to a total cost of more than $400 billion. The core of the bill is $76 billion in direct funding for domestic semiconductor manufacturing through a variety of grants and tax credits. The rest of the money, beyond doubling the budget of the notoriously silly spenders at the National Science Foundation, is predictably a billion here and a billion there for vaguely named programs with even more ambiguous purposes. For example, as the Wall Street Journal editorial board pointed out, “The Commerce Department gets $11 billion, most of which it intends to plow into creating 20 new ‘regional technology hubs,’ which will somehow expand ‘U.S. innovation capacity.'””
“Proponents of the legislation would have you believe that the U.S. is overly reliant on foreign, unreliable suppliers of semiconductors, particularly those under threat from China. Semiconductors are unbelievably important components in practically countless goods relied on every day, but that’s no excuse to ignore the fact that the domestic semiconductor industry is, per a 2020 report by the Semiconductor Industry Association, “on solid footing.” U.S.-based semiconductor firms hold nearly half of the global market share, and 44 percent of that production already occurs in the U.S. Moreover, these figures don’t even capture firms based in allied countries such as South Korea and Taiwan that are currently spending billions of dollars to open semiconductor manufacturing facilities in the U.S.—without the need for funding.”
“Biden’s administration did nothing to bring about the deficit’s decline. Credit really goes to large increases in tax revenues as the economy rebounded combined with the decision by Sens. Kyrsten Sinema (D–Ariz.) and Joe Manchin (D–W.Va.) and their Republican colleagues to block Biden’s expensive “Build Back Better” proposal. BBB would have made permanent many of the emergency programs created or expanded during the pandemic, and had it passed, government spending and deficits would be heading even higher than they are today.
That said, the still-too-close-to-$1 trillion deficit for FY 2022 is inexcusably large. More worrisome is the cost that we taxpayers must shoulder because of the pre- and post-COVID-19 deficits. According to that same Treasury report, in May, the U.S. government paid $56 billion in interest payments on its debt, up from $44 billion in April. As of now, total interest payments for this year are $311 billion. With four months still to go on this figure, we can assume a total interest cost for FY 2022 of at least $500 billion.
This is just the beginning. Before the pandemic and the inflation unleashed by irresponsible government spending and easy money, the Congressional Budget Office projected that in 2050, interest payments on U.S. debt would consume 8 percent of GDP and 40 percent of government revenue. These projections assumed modest increases in interest rates over a long-term period. However, as of today, the short-term figures look optimistic as inflation and the Federal Reserve’s response to it are boosting interest rates.”
“It’s expensive for sure, but it is also a vicious cycle if the interest is paid for with yet more borrowing. More borrowing raises total interest payments. In addition, if one believes (as I do) that most of our current inflation is rooted in recent fiscal irresponsibility, then more borrowing to pay for more interest will only add more fuel to the inflation fire.
Finally, as the average interest rate on marketable debt approaches 2 percent, we are getting close to the threshold that some left-leaning economists say should trigger concerns about the size of government debt.”
“the budget deficit might be smaller than at the height of the pandemic, and that is a good and predictable thing. But it’s no cause for celebration as interest rates and servicing costs could push us into worrisome territory sooner than we think.”
“Senate Majority Leader Chuck Schumer (D–N.Y.) has reportedly brokered a deal with Sen. Joe Manchin (D–W.Va.) to pass a slimmed-down version of President Joe Biden’s spending plan—now to be marketed as an attempt to curb inflation.”
“The bill will include $370 billion in new spending on climate change initiatives and green energy projects—a linchpin of Biden’s Build Back Better plan through its many, many interactions over the past year—and would dedicate about $300 billion of revenue toward reducing the deficit, which has been Manchin’s top priority.
The bill also reportedly includes a three-year extension of the expanded Affordable Care Act (ACA) subsidies originally passed as a temporary measure during the early days of the COVID-19 pandemic, as well as changes to how federal health insurance programs price prescription drugs. Though pitched as a way to cut costs for households, the extension of those ACA subsidies could actually worsen inflation, as Reason’s Peter Suderman has explained.
The spending and deficit-reduction items will be funded with a series of proposed tax increases. Politico reports that the bill would impose a 15 percent corporate minimum tax, expand the IRS’ enforcement division (a questionable means for generating revenue, it should be noted), and close a commonly used business tax break for carried interest. The tax changes would generate about $739 billion over the next decade, according to The Washington Post.”
“For today, at least, Joe Manchin seems to have gotten his way.”
“The inconvenient truth behind all this fraud and waste is that these government programs never should have been designed as they were. For example, while the federal government justifiably boosted state unemployment benefits at the beginning of the pandemic, it was irresponsible to enhance the benefits by $600 a week. As a result, 76 percent of the individuals who received such benefits were making more by not working than by working. It was also irresponsible to extend the program long after the economy reopened and resumed growing.
The same is true of the overly generous three rounds of $1,200, $600, and $1,400 individual payments paid to people who either already received the enhanced unemployment benefits or who never lost their jobs. Most recipients of these funds didn’t need them. In fact, only 15 percent of people who received the first round of checks said they had spent it or planned to spend it. And there were other benefits on top of these checks.”
“This non-fraudulent spending is now helping to fuel inflation.
Then, you have the money dispensed to corporations. In one way or another, that spending made up a huge share of the COVID-19 relief. Indeed, whether through the airline bailouts or the Payroll Protection Program, shareholders collected trillions of dollars in government handouts they didn’t need. Most of the PPP funding, for example, went to companies whose workers were never at risk of losing their jobs since they were well-suited to work from home.”
“billions of dollars went to state and local governments, including for schools that stayed closed, even though many of these governments’ revenue growth equaled or exceeded pre-pandemic levels.
Of course there was some fraud, but the malfeasance happened only because the programs were created in the first place and designed to go to everyone regardless of need. This reckless “design” is the true scandal.”
“In early April, Texas Gov. Greg Abbott unveiled a controversial plan to send buses full of undocumented immigrants to Washington, D.C. The policy, Abbott said, would “help local officials whose communities are being overwhelmed by hordes of illegal immigrants.”
But it turns out those communities might be stuck footing the hefty bill for Abbott’s busing scheme. According to state records obtained by Dallas–Fort Worth’s NBC 5, bussing costs came out to over $1.6 million in April and May. With 1,154 migrants transported during that period, the per-rider cost was roughly $1,400.
That’s far more expensive than a commercial bus or train ticket would’ve cost—a one-way journey from El Paso, Texas, to Washington, D.C., runs somewhere between $200 and $300 as of this article’s writing. It’s also more expensive than a first-class plane ticket from a border town to Washington, which NBC 5 reported ranged between $800 and $900. And it’s more than the public spends on average to transport a student to school for an entire school year.
NBC 5 notes that costs are so high in part because the state has hired security guards to staff each bus.”
“Costs are further inflated by the fact that buses drive back to Texas from Washington empty, having dropped off their passengers. Texas, however, gets billed for all total mileage.”
“Abbott’s busing plan is by no mean his only expensive anti-immigrant endeavor. He vowed last year to build a wall along his state’s border with Mexico, initially transferring $250 million in state revenues to the project as a “down payment.” A donation page for the wall has collected $55,322,273 as of May 27—unlikely to make a significant dent, given that a section of former President Donald Trump’s border wall in Texas came out to $27 million a mile. Abbott’s border-securing mission, Operation Lone Star, costs taxpayers over $2.5 million per week. That effort also left hundreds of migrants in pretrial detention for weeks or months over misdemeanor trespassing charges”
“The widespread use of COVID relief funds to line the wallets of public employees should also raise even more questions about whether a federal bailout of state and local governments was necessary. Expected revenue shortfalls in state and local tax coffers never materialized—and many states emerged from the pandemic with surpluses instead.
States have until the end of 2024 to spend the federal aid distributed as part of the American Rescue Plan, so the totals reported so far (the Treasury’s tracker has been updated to include spending through December 31 of last year) could increase.
In an analysis of the spending published last month, the Treasury notes that state and local governments spent $5 billion of their federal COVID aid on “worker support,” a category that includes those bonuses along with things like unemployment payments and job training. That’s the same amount of money that states and local governments reported using for actual COVID relief—a category that includes “vaccinations, testing, contact tracing, PPE, prevention in congregate facilities, medical expenses, and other public health measures.””
“An unnecessary federal bailout of state and local governments has given an undeserved mulligan to some money-losing government-owned golf courses.
That’s despite the fact that some of those same courses reported an increase in customers during the COVID-19 pandemic. According to reports submitted to the Treasury Department and reviewed by Reason, Union County, New Jersey, has committed $929,000 of its federal COVID funds to a pair of county-owned golf courses: Galloping Hill and Ash Brook. That spending will help the courses cover “costs associated with increased use” as a result of “an increase in play at county golf courses due to the COVID-19 pandemic.”
That’s the sort of problem that many private businesses would probably love to have. Either as the result of government-imposed lockdowns or changes in consumer behavior during the pandemic, recreational spending on restaurants, bars, concert venues, and theaters plummeted. If that made golfing—an outdoor, socially distanced activity—more popular, why should taxpayers now have to bail out a business that got more successful?”
“In a report published earlier this year, the Reason Foundation (the nonprofit that publishes this website) found that 155 local governments lost a combined $61 million by running golf courses during their 2020 fiscal years. One of the biggest losers was Thousand Oaks, California, which lost a staggering $800,023 on a single city-owned golf course in 2020.
Naturally, that course got a piece of the federal bailout too. The Treasury Department’s tracker of American Rescue Plan spending shows that Thousand Oaks plans to spend more than $14 million on “revenue replacement” on a variety of items, including “city-owned theatres and golf course.” It’s not clear from the data provided to the Treasury Department how much of that money will be spent on the golf course (nor is it clear why the city owns multiple theaters, but that’s for another day).”
“”Congress really put taxpayers in the rough,” says Tom Schatz, president of Citizens Against Government Waste, a fiscally conservative nonprofit. He says Congress should have placed stricter limits on how the $350 billion state and local government bailout could be used.
Those funds were included in the $1.9 trillion American Rescue Plan, passed by Congress in March 2021, and were ostensibly meant to cover pandemic-related public health costs or to offset lost tax revenue due to the economic consequences of COVID-19. Even before the law was passed, there were questions about whether such a large bailout of state and local tax coffers was necessary or prudent.
It seems to have been neither, as most governments did not experience a significant revenue shortfall due to the pandemic. Now flush with extra cash from Washington and few restrictions on how to use it, some state and local governments are blowing the money on pet projects like government-owned golf courses and bonuses for government workers”
“Other obviously vital public health costs being covered by the American Rescue Plan’s local government bailout fund include the planting of new trees “including ash, spruce, maple, pine, [and] cherry” and the installation of a new irrigation system at a government-owned golf course in Elmira, New York, according to Treasury Department data. That’ll burn through $1.2 million of federal funds.
In Lexington, Kentucky, a government-owned course that brags about containing “the longest par-5” hole in the state, will be getting a new irrigation system with the help of more than $1.3 million from the federal bailout. The course is already “a local favorite and an attraction to visitors,” the county wrote in its project summary submitted to the Treasury Department, but the desired upgrades haven’t been made due to a lack of funding from the local government.”
“President Joe Biden’s bipartisan infrastructure bill apportioned $1.2 trillion for such projects as roads, bridges, and airports. But it also designated $65 billion “to help ensure that every American has access to reliable high-speed internet” by funding broadband expansion. This included a $45 billion “Internet for All” program, under which Biden pledged to expand broadband access to all Americans by 2030.
But this was not the first tranche of federal funds dedicated to expanding internet access: The 2009 stimulus bill allocated more than $7 billion toward broadband grants for rural areas, and expenditures have grown since. A new report from the Government Accountability Office (GAO) shows that the return on that investment has been underwhelming.
The report, titled “Broadband: National Strategy Needed to Guide Federal Efforts to Reduce Digital Divide,” was released…Based on Biden’s pledge of getting to universal broadband access by the end of the decade, the GAO studied the government’s current broadband programs and expenditures, looking for shortcomings or areas of improvement.
What it found was a jumbled mess.
“Federal broadband efforts are fragmented and overlapping,” with “at least 133” programs “administered by 15 agencies,” the report found. These agencies varied widely, with the three largest being the Federal Communications Commission (FCC), the U.S. Department of Agriculture (USDA), and the National Telecommunications and Information Administration (NTIA), which is part of the Department of Commerce. Between FY 2015 and FY 2020, these programs collectively dispensed at least $44 billion in broadband assistance.
In practice, so many programs from so many agencies all pursuing the same goal leads inevitably to waste. In one case the report cites, “multiple providers received funding from different programs to deploy broadband to the same county in Minnesota.” If the goal of the federal broadband effort is to expand into areas that lack access, then there is no reason to fund multiple providers in the same area.”
“Overall, the report determined, “The U.S. broadband efforts are not guided by a national strategy with clear roles, goals, objectives, and performance measures.””
“A previous GAO report noted that while the federal government invested over $47 billion in rural broadband infrastructure between 2009 and 2017, the broadband industry invested $795 billion over the same period. To the extent that federal funding would ever be necessary, it would be to fill in any gaps the private sector was unable to cover.
“The problem is the Biden administration is prioritizing the government being the provider,” rather than the private sector, says Swarztrauber. “The rhetoric is all about how we should prioritize the local government being the owner and operator of the network.”
In the past, such plans consistently lead to higher costs, corrupt bidding processes, and technology inferior to what’s offered by the private sector. But the Biden administration is moving full steam ahead, with NTIA Administrator Alan Davidson saying last month that his agency would “press” states to allow more municipal broadband programs.”