Oh goody! Last week’s daily newspaper headline: “Federal windfall fills Del. coffers.”
And there’s a subhead: “State getting $75.6 million to use for teachers, Medicaid.”
And more good news! It’s paid for!
Well, let’s look at this “paid for” claim for a minute.
To begin with, the federal government is running a tremendous deficit, well beyond $1 trillion.
To make up the deficit, the United States is on a borrowing binge. China and Japan alone are owed billions. Unlike the states, the federal government appears to operate with no restraint when it comes to using foreign borrowing to supplement its spending.
In this instance, however — referring to the $26 billion the Congress supplied last week for disbursements to the states — the “payment” for this largess is in the form of two major tweaks in the federal budget.
In brief, one tweak is closing a “loophole” for corporations that keep their legal homes offshore. This is supposed to bring in an extra $9.6 billion. The other is to reduce food stamp benefits to pre-stimulus levels in 2014, saving $11.9 billion.
What’s more than a little odd about the latter tweak is that the $26 billion going to the states is to help the states, in addition to meeting education expenses, with their rising Medicaid payouts. And Medicare, of course, is designed to help people strapped for funds, many of the same people who qualify for food stamps.
The states do have an argument when it comes to Medicaid, which is essentially a federal entitlement with the states assigned to pay the bill.
Concerning education, however, meeting that expense is essentially a state responsibility.
And when a state accepts a “gift” for meeting its budget in that area, it is also setting itself up for a hole in its budget when the next fiscal year rolls around and there is no “windfall” to fill the gap.
Note: It was a surprise to me that Rep. Mike Castle was one of two Republicans voting for the $26 billion.
