The person most responsible for preventing the economy from creating jobs wants to be our friend. “We can’t wait” is the Obama administration’s newest slogan. We Can’t Wait to Create Jobs, We Can’t Wait on Congress: The Time to Act is Now, and “We Can’t Wait” to Strengthen the Economy and Create Jobs are splashed across White House media releases.1,2 Just who the “we” refers to is up for grabs. Does Barack Obama want to be America’s buddy so he can keep his job, or is he referring to a partnership with the public sector employees he wants to rescue with our tax dollars?
Illinois Governor Pat Quinn crossed the line when he proposed that the Federal Government help out with his state’s finances by guaranteeing $85 billion in unfunded pension liabilities.3 GOP House members responded with a letter slapping down Quinn’s request, citing the need to address reform for the state’s public pension system. What will happen when states start to go belly up, demanding federal help as Washington assures taxpayers that it will cut spending?
The president has already answered the question. State bailouts hide behind a façade of job creation measures that put public employees in front of the greater good. States are in big trouble, and that means public sector unions are in jeopardy. If the president gets his way, Uncle Sam will help foot the bill for their workers.
Unfunded state and local pension liabilities rose from $200 billion in 19924 to as high as $3.8 trillion in 2009.5 State measures to rein in costs, like limiting collective bargaining for public workers, or ending incentives for illegal immigrants, have been halted in the courts. Is the only alternative to fund irresponsibility with federal bailouts (see: New Jobs Act Bankrolls Irresponsible States)?
The White House release Teacher Jobs at Risk shows how the five states with the largest number of students will benefit from the president’s American Jobs Act. Four of these states, California, Texas, Florida, and Illinois, also boast the highest illegal immigrant populations in the nation. The fifth state, New York, is tied with Georgia for seventh place.6 California, Texas, Illinois, and New York also grant resident tuition to illegals. If you want to see what this costs their taxpayers, go to a state university website for any of these states, and compare resident and non-resident tuition rates.
The words “illegal” and “immigrant” never appear in Teacher Jobs at Risk. The words “pension” and “benefits” are never used, either. When times were good, states indulged themselves. When the recession struck and investment returns dwindled, they ran out of money to cover their obligations. Enormous liabilities have been amassed. The worst offenders still refuse to accept the consequences of spending on luxuries like inflated public worker pay and benefits while they face financial Armageddon.
President Obama is correct that Washington must solve this problem, but his solution is foolishness. Spending on public sector workers fixes nothing, and referring to salary funding as job creation is a fraud perpetrated on taxpayers who will foot the bill. Instead, we need to give states a reason to be responsible. The only roadblock is our president, and his lackeys in Congress.
First, we need to give the private sector a helping hand. We should pass the business-friendly items in the American Jobs Act. The president says he wants to do this. Why not do it now?
Second, we need to help our states. America is all about freedom, so first and foremost, states should be able to do whatever they want. The only caveat is that we will not hand them any federal money, not for education, highways, or anything else, until they learn to accept responsibility for their finances. Here are a few things we can do to help them manage their money:
1. No more federal handouts for public sector salaries. States and localities can only employ the workers they can afford. Not enough police on the streets? When crime gets bad enough, residents will leave, and enforcement becomes affordable again. Not enough teachers in the schools? Then school systems can stop hiring teaching assistants, teacher’s aids, and other employees they can no longer afford. They can cut pay, and they can cut benefits, just like the private sector.
2. Stop empowering unions to ruin state budgets. This is an ongoing crisis, not a temporary downturn. Deny federal money to states that allow collective bargaining for public sector workers. Empower states like Ohio and Wisconsin, who try to change their laws to protect their budgets, by leaving them alone.
3. No more federal assistance to states that give breaks like resident tuition and financial aid to illegal immigrants. Require schools to check the immigration status of students. The president and his DHS flunkey, Janet Napolitano, claim enforcement is a resource issue. A simple immigration form for schools to send home might be just the inexpensive solution they need. We can inject a little fear and doubt, and watch the illegals clear out, just like they did in Alabama.
4. Refuse federal money for states that do not transition new employees to 401(k) pension plans. No more defined benefit plans for public sector workers. States are broke. The salad days are over.
5. States are on their own for their pension costs, whether this means pursuing legislative options to fix the laws already on their books, or defaulting on their obligations. Perhaps public sector unions can think of a way to help make up the difference, since they helped to create the problem.
There are those who will say these ideas are inflammatory, reactionary insanity, but if you take the converse of these measures, you will have the Democratic plan for fixing the economy. That scheme has been a disaster.