Washington's financial hot potato
Wednesday, February 9, 2011
The Missouri Legislature is struggling with an interesting problem on just how, when or if to spend $189 million in federal funds to help struggling school systems pay their staffs.
The funds are part of the Obama administration's attempt to infuse tax dollars into the struggling economy. But as with so many other issues in Washington, the funds come with little direction.
That has put the legislature into a head spin.
Some fiscal hawks in Missouri want to reject the funds in a symbolic gesture to show their disdain for the mounting federal deficit. But others acknowledge that the gesture would be empty because the funds would simply be allocated to other states. Given the history of this administration, believe me, those funds would be spent elsewhere.
But it's too late now to move that money to the schools. Instead, the growing consensus is to reserve those funds for the next school year. But school administrators know this is a one-time funding boost and they are reluctant to make long-term plans with short-term money.
But here's the economic reality of this issue. In Missouri, 83 percent of the school districts reduced staff this school year. Facing budget deficits, school districts large and small have faced the financial reality and made the necessary cuts.
That is a lesson lost on our federal government.
I read last week a report on union membership in Missouri which has declined steadily for decades. But this past year, union membership posted a gain -- albeit a small one. And what was the origin of that increased union membership? Government workers!
That's right. The sole source of increased union membership here and elsewhere stems from government hiring. And who pays those salaries? You guessed it.
If state and local governments are forced to rein in their spending because of reduced revenue, why has our federal government not taken notice?
The president's much-touted Deficit Reduction Commission called for a 15 percent reduction in the federal work force, largely through attrition. Have any of their recommendations been implemented? You guessed it again.
This financial hot potato is the sole source of political talk in Washington. But hot air will get us nowhere.
The solution is obvious. Medicaid, Medicare and Social Security. It won't be popular. But it will be right.
When your budget is out of whack, there are only so many solutions. Just ask any school superintendent across Missouri.