Why is it that no matter how much our government spends, and no matter what we are promised in return, things never get any better? Democratic stronghold Illinois could be over $8 billion in the hole next year despite a massive, retroactive tax increase (see: Illinois Raises Income Tax, Then Hikes Benefits). While Illinois residents listen to proposals that include a city income tax for Chicago and tolls on Lake Shore Drive, they can at least take comfort that the state scratched up $4 billion to make a payment for public employee pensions.
The president’s reelection campaign is going to hurt states in ways they never imagined. Despite the White House’s strategy to separate the president from Congress to protect his sagging approval rating, Harry Reid is backing the president’s demands to spend billions on paychecks for teachers and other public employees. Reid lumps teachers together with plumbers and factory workers to shame us into approving a tax hike to fund the American Jobs Act:
The top 400 earners in this country – all of whom make more than $110 million a year – pay a smaller percentage of their income in taxes than plumbers and teachers and factory workers do.1
We keep hearing that the wealthy are allowed to keep too much of their earnings and assets, but higher earners are not the ones bankrupting states with the cost of their salaries, pensions, and benefits. State and local officials have worked with public employee unions to cause irreversible fiscal damage, but our president continues to argue that we should help states pay for the cost of their workers. While stumping at an endless series of DNC events, the president demonstrated his fundamental misunderstanding of how a free market economy works, claiming that the government had created private sector jobs, and that it is time to do the same for teachers:
Let’s put teachers back in the classroom. We’ve created over 2 million jobs over the last 18 months in the private sector.2
The number of teachers we are supposed to pay for with the Jobs Act is up for grabs. Arne Duncan offered this estimate:
And he [the president] proposed an additional $30 billion to keep hundreds of thousands of educators facing potential layoffs and furloughs in classrooms where they belong—instead of on unemployment lines.3
The president’s numbers were less optimistic than Duncan’s, dropping from the Education Secretary’s hundreds of thousands to mere tens of thousands:
That’s why the jobs bill I sent to Congress would put tens of thousands of teachers back to work across the country, and modernize at least 35,000 schools. And Congress should pass that bill right now.4
Whether the goal is tens of thousands, hundreds of thousands, or just some quick cash for an election year splurge, billions spent on a state education and services bailout will not solve the problem for financial catastrophes like Illinois. We tried that route with the Recovery Act and the Teacher Jobs Bill, and the situation has not improved. Illinois is still broke, and looks to be a lot broker by this time next year as public employee pension and benefit costs help to destroy the state’s economy. An equally broke Washington disregards the fact that the Federal Government no longer has the resources to offer support, no matter what it manages to seize with a tax increase.
Illinois is vying to beat California as the poster child for permitting states to go bankrupt, but Arne Duncan views Illinois as a paragon of reform and responsibility:
I am equally enthusiastic about the groundbreaking reforms under consideration by the Illinois legislature. While states all across America are wrestling with difficult and complex educational issues from teacher evaluation and staffing to compensation and tenure, Illinois has steadily and effectively built consensus for real and meaningful change among all of the key stakeholders, and set a national example of constructive collaboration for other states to follow.5
Duncan doesn’t get it, and neither does the president. Illinois is a fiscal train wreck, and it has lots of company. Every taxpayer in America is going to be punished so public employees can continue to collect generous pensions and benefits mandated by unions and irresponsible state legislators. If the Federal Government wants to bail out public employees, then salaries need to be cut, pensions and benefits need to be slashed, and unions need to be removed from the picture. Otherwise, all we are doing is buying time while states postpone fixing the problem as their pension and benefit obligations grow larger (see: New Jobs Act Bankrolls Irresponsible States). Robbing the rich and giving the money to public employees while Arne Duncan preaches about $150,000 teacher salaries (see: Will Taxpayers Support Raising Teacher Salaries 165%?) is not going to make life better for anyone, except those chosen few who, like Duncan, stand to benefit from a ride on Barack Obama’s reelection train.