AROUND NEW HAMPSHIRE
1. Increasing Treatment Funding
N.H.'s 'Drug Czar' Funded For Two More Years
by Paige Sutherland, nhpr.org, October 23, 2015
The state can now begin spending more than $3 million dollars to address substance abuse in the state budget. That’s after the Governor’s Commission on Alcohol and Drug Abuse on Friday finalized plans for the money.
Three-hundred-thousand-dollars will go for more treatment beds, $200,000 for medication assisted treatment and $125,000 will be bound for a pilot program in Keene that works to help those at-risk for addiction.
But the only friction at the meeting was around whether to fund the state’s drug czar position, which was eventually approved for two years. Several questioned the position and the performance of Gov. Maggie Hassan’ pick for the job – JackWozmak.
But New Hampshire’s public safety, corrections and health and human services commissioners, who meet weekly with Wozmak, were in favor of keeping it.
“There’s so many gaps that are still not being addressed, and I think our best hope is this position because none of us have the time to do it,” said Public Safety Commissioner John Barthelmes.
Attorney General Joe Foster also supported Wozmak's role. “He brings up ideas, he cross pollinates ideas and we coordinate way better than we otherwise would,” Foster told the commission.
The overall funding for substance abuse is more than double the amount that was in the last state budget.
2. Democratic Possibilities for the Open Seat in Executive Council District 2
Somersworth Mayor Hilliard eyes run for open Executive Council seat
Many Democrats viewed as potential successors to candidate for governor Van Ostern
by John DiStaso, wmur.com, October 22, 2015
CONCORD, N.H. —Even in the midst of an intense presidential primary campaign, the New Hampshire political scene continues to be buzzing at the state level.
The dominoes from Gov. Maggie Hassan’s decision to run for the U.S. Senate continue to fall on the Democratic side of the aisle.
There is currently much speculation about who will run in 2016 to succeed outgoing Executive Councilor Colin Van Ostern of Concord, who has announced that he is a candidate for governor, hoping to succeed Hassan.
And Somersworth Mayor Dana Hilliard told WMUR.com on Thursday he is strongly considering running next year for the District 2 Executive Council seat that Van Ostern is vacating.
Hilliard, who is also the principal of the Somersworth Middle School, is unopposed in his bid for a second term as Somersworth mayor and made it clear in an interview that he promises to serve his full two-year term in that office even if he runs for, and is elected to, the Executive Council.
“If I were to seek the Executive Council seat, by no means would I be leaving as mayor in mid-term,” Hilliard said.
While insisting that a possible run for the council is in the “infancy stage,” Hilliard said, “With Colin announcing that he is running for governor, things are moving faster than they were before. I’ve been approached and encouraged by several people to examine and see whether I’d be interested in seeking the seat.
“I’m honored by the encouragement. It’s certainly an interesting proposal and I’ll be giving serious thought to it. But my focus now is on my re-election and a plan to move Somersworth forward.”
When the districts for elected offices from the U.S. House to state representatives were redistricted in 2010, Republicans created a single, highly-Democratic council District 2 that stretches across the state from Dover and Somersworth in the east, to Concord in the central part of the state, to Keene and neighboring communities in the west.
It was a GOP effort to limit the Democrats to one sure council seat, while hoping to keep the other four districts in Republican hands. The current council, however, comprises three Republicans and two Democrats.
But District 2 is a virtual lock for Democrats given the political demographics of the state, creating much interest among observers in who will run to succeed Van Ostern.
WMUR.com’s New Hampshire Primary Source column reported Thursday morning that attorney Andru Volinsky of Concord is being encouraged to run for the seat.
Other Democrats being mentioned in conversations by party activists are Sen. Molly Kelly of Keene; former state Senate President Sylvia Larsen of Concord; former state Sen. Katie Wheeler of Durham; outgoing Rochester Mayor T.J. Jean; current state Sens. David Watters of Dover and Dan Feltes of Concord; former state Health and Human Services commissioner Ned Helms of Concord; Mayor Jim Bouley and City Councilor Amanda Sexton Grady, also of Concord; and state Reps. Wayne Burton and Marjorie Smith, both of Durham.
Hilliard said he has roots and connections on both sides of the state. He said he was born and raised in Somersworth and is a graduate of Keene State College.
“I think if I ran, I’d be successfully able to link the line across the state,” he said. “I’m certainly going to give it some thought and see if it’s something I want to pursue.”
Each of the five members of the Executive Council represents a geographic area of the state. The council is charged with reviewing, and approving or rejecting, all state contracts of at least $25,000. It also has final say on the governor’s nominations of judges and department commissioners and oversees the state’s 10-year highway plan.
Van Ostern is one of two members of the council vacating their seats. Republican Chris Sununu of Newfields announced in September that he is leaving his District 3 seat to run for governor, creating interest on the Republican side in who may succeed him. Republicans Joe Kenney and David Wheeler, and Democrat Chris Pappas, are expected to seek re-election.
So far in Sununu’s District 3, only one candidate, Salem attorney Beth Roth, has emerged, and she is a Democrat.
3. Starting the Tax Conversation
It's time New Hampshire talked about its regressive tax structure
Editorial, sentinelsource.com, October 23, 2015
It’s been 13 years since Peterborough lawyer and former state Sen. Mark Fernald ran for governor, staking his candidacy largely on the idea that New Hampshire should alleviate some of the burden and inequity on its property tax payers by implementing an income tax.
He had many other policy ideas, but in the public view, Fernald was the income-tax candidate, tilting at the “no broad-based tax” pledge windmill that has, for decades, dominated political policy in the Granite State. Fernald lost by 20 percentage points to millionaire businessman Craig Benson, and though Fernald rightly points out Benson outspent him by millions of dollars, the defeat had the appearance to many of a sound rejection of the idea of an income tax. At the very least, it seems to have left politicians with the idea that an overhaul of the state’s tax structure is a nonstarter.
Since then, the topic was raised in Concord several times almost annually, though no bill related to an income tax has made it past the committee stage. Over the past several years, the idea has only made it into legislation once, and that was for a county, not statewide, income tax. It, too, died in committee.
The same fate may be in store for legislation proposed by Rep. Paul Henle, D-Concord. Henle is offering a plan to shift the tax burden from property owners by enacting a 3.75 percent income tax. In exchange, Henle would repeal the statewide property tax, the utility property tax and the business enterprise tax; lower the business profits tax to 3.75 percent; and reinstate revenue sharing.
Henle says the moves would free up $400 million annually from property taxes, which could then presumably be spent by consumers at New Hampshire businesses. That sounds good, although he also says the plan is revenue neutral; it’s not designed to change the amount of revenue the state takes in, just the method of raising it. And that means that $400 million isn’t really being freed up, just reapportioned. It would be paid through the income tax. And while the plan would lower direct business taxes, instituting an income tax might prove an even higher barrier to drawing companies to the state. No business owner or top exec is going to be pleased with the idea of the state taking his or her personal earnings.
But the merits of the plan’s specifics are beside the point. We’re pleased to see Henle pushing an idea that would change the regressive way New Hampshire raises revenue. The overreliance on property taxes to pay for local and county government and education leaves those on low or fixed incomes straining to make ends meet, while those with plenty of money — remember, New Hampshire ranks sixth in per capita income — are relatively unencumbered. It’s also an unfair tax burden, keeping communities with lower tax bases from being able to provide the services of those that happen to be popular vacation destinations or host large industries.
Fernald, who’s probably given as much thought to the issue of state tax equality as anyone, points out that since 1999, the average property tax bill in New Hampshire has increased by more than 50 percent, adjusting for inflation. In the same time frame, the state government’s general revenues have actually dropped.
Facing a Legislature with both chambers controlled by conservatives, and with a governor who initially ran for that office while taking the antiquated, head-in-the-sand “no broad-based taxes” pledge, the chances of Henle’s bill getting out of committee, much less past the governor’s desk, are virtually nil. But what good can come out of the effort is to get state leaders talking about the inequity of our tax system at a time when income inequality is a hot-button issue on the national stage.
“I think it’s a conversation we need to have,” said Fernald. “I think it’s great someone in the state Legislature is looking at this.”
The state hasn’t had any real discussion of the topic since Fernald left state politics. We agree it’s time that discussion was restarted.
4. Advocates for Public Education
NH group to promote public education
by Garry Rayno, unionleader.com, October 22, 2015
CONCORD — A diverse group of educators and business and civic leaders hopes to harness support for high standards in public education.
The nonprofit Reaching Higher New Hampshire includes teachers, administrators, businessmen, elected officials and political activists who will come together through discussions about quality public education and how to speak with one voice in its support.
“We, as a board, are a heterogeneous group, but we speak together with a clear voice for a greater good,” said Tom Rath, president and founder of Rath, Young and Pignatelli law firm and a longtime political adviser. Rath chairs the group along with attorney Alan Reische of Sheehan Phinney Bass & Green.
“There are significant and critical changes coming in public education,” said Reische. “Reaching Higher New Hampshire will help parents, educators and policy-makers understand and respond to the challenges our schools face — from the new demands on our teachers to increased expectations for what our students will know when they graduate from high school.”
Several members of the group said education never used to be a political issue, but it has become one today.
“To the extent possible, we ought to avoid politicizing it (education) and instead make sure to maximize support for a great public education for all our kids,” said Concord developer and current Republican National Committeeman Steve Duprey.
Duprey said he received a tremendous education going through the Conway public school system and his kids received a great education in Concord public schools.
“The goal of New Hampshire public education is that every single child — from the kid from the poorest family in the state to the kid from the wealthiest — have a great education,” Duprey said. “That is the answer to the opportunity gap, and that is the way to grow the New Hampshire economy — if the state has a reputation for great public schools.”
He said the business community needs to do a better job of supporting public education and being involved at the local level. That is how businesses get the trained workers they want, Duprey said.
The group wants to foster statewide discussions about the future of public education, and says progress will be made only with bipartisan cooperation and compromise.
“We’re all in this together,” said Lew Feldstein, retired president of New Hampshire Charitable Foundation. “As parents, we want to see our children succeed. As educators, we take pride in the accomplishments of our students. As businesspeople, we rely on our work force and want to help our schools prepare students for the jobs of tomorrow. And as proud citizens of New Hampshire, we want to ensure that every student gets a fair opportunity to dream and achieve.”
Some members of the group’s board of directors have been meeting informally for several years, “helping each other out where we could,” said Scott McGilvray, president of the National Education Association–New Hampshire. Working with several members of the state Board of Education, they sought people from all walks of life who are strong advocates for public education, he said.
“We wanted to bring together a whole lot of people who could be one voice,” McGilvray said. “The other side is not as big as it seems in the media, but they have real loud voices at the State House and out in the public.”
Public education is doing good things in New Hampshire and has been on the forefront of such things as competency-based instruction that other states are just now exploring, he said, noting that message needs to get out.
Reaching Higher intends to work with lawmakers and the public on education issues, the group said, while building a network of parents and educators to advocate for public education.
The other members of the board include:
• Donnalee Lozeau, outgoing Nashua mayor;
• Kass Ardinger, Concord School Board member;
• Dr. Mark Joyce, E.D., NH School Administrators’ Association;
• David Juvet, Business and Industry Association of NH senior vice president for public policy;
• Selma Naccach-Hoff, Manchester High School Central English department head;
• Pawn Nitichan, City Year New Hampshire executive director.
The nonprofit Reaching Higher New Hampshire includes teachers, administrators, businessmen, elected officials and political activists who will come together through discussions about quality public education and how to speak with one voice in its support.
“We, as a board, are a heterogeneous group, but we speak together with a clear voice for a greater good,” said Tom Rath, president and founder of Rath, Young and Pignatelli law firm and a longtime political adviser. Rath chairs the group along with attorney Alan Reische of Sheehan Phinney Bass & Green.
“There are significant and critical changes coming in public education,” said Reische. “Reaching Higher New Hampshire will help parents, educators and policy-makers understand and respond to the challenges our schools face — from the new demands on our teachers to increased expectations for what our students will know when they graduate from high school.”
Several members of the group said education never used to be a political issue, but it has become one today.
“To the extent possible, we ought to avoid politicizing it (education) and instead make sure to maximize support for a great public education for all our kids,” said Concord developer and current Republican National Committeeman Steve Duprey.
Duprey said he received a tremendous education going through the Conway public school system and his kids received a great education in Concord public schools.
“The goal of New Hampshire public education is that every single child — from the kid from the poorest family in the state to the kid from the wealthiest — have a great education,” Duprey said. “That is the answer to the opportunity gap, and that is the way to grow the New Hampshire economy — if the state has a reputation for great public schools.”
He said the business community needs to do a better job of supporting public education and being involved at the local level. That is how businesses get the trained workers they want, Duprey said.
The group wants to foster statewide discussions about the future of public education, and says progress will be made only with bipartisan cooperation and compromise.
“We’re all in this together,” said Lew Feldstein, retired president of New Hampshire Charitable Foundation. “As parents, we want to see our children succeed. As educators, we take pride in the accomplishments of our students. As businesspeople, we rely on our work force and want to help our schools prepare students for the jobs of tomorrow. And as proud citizens of New Hampshire, we want to ensure that every student gets a fair opportunity to dream and achieve.”
Some members of the group’s board of directors have been meeting informally for several years, “helping each other out where we could,” said Scott McGilvray, president of the National Education Association–New Hampshire. Working with several members of the state Board of Education, they sought people from all walks of life who are strong advocates for public education, he said.
“We wanted to bring together a whole lot of people who could be one voice,” McGilvray said. “The other side is not as big as it seems in the media, but they have real loud voices at the State House and out in the public.”
Public education is doing good things in New Hampshire and has been on the forefront of such things as competency-based instruction that other states are just now exploring, he said, noting that message needs to get out.
Reaching Higher intends to work with lawmakers and the public on education issues, the group said, while building a network of parents and educators to advocate for public education.
The other members of the board include:
• Donnalee Lozeau, outgoing Nashua mayor;
• Kass Ardinger, Concord School Board member;
• Dr. Mark Joyce, E.D., NH School Administrators’ Association;
• David Juvet, Business and Industry Association of NH senior vice president for public policy;
• Selma Naccach-Hoff, Manchester High School Central English department head;
• Pawn Nitichan, City Year New Hampshire executive director.
5. Ayotte: No Friend of Working Families
Ayotte Fact Check: Opposing Efforts To Help Working Families
by Ttaraila, nhdp.org, October 23, 2015
Concord, N.H. – As part of the New Hampshire Democratic Party’s “Ayotte Fact Check” accountability project, we will be highlighting a different area of Kelly Ayotte’s true Washington record every day this week.
Today’s focus is Ayotte’s record of opposing efforts to help working families.
“In Washington, Kelly Ayotte has repeatedly voted to put lobbyists and special interests before New Hampshire’s hard-working families, and Granite Staters deserve better,” saidNew Hampshire Democratic Party Chair Raymond Buckley. “From saying that guaranteed paid leave should be left to the whim of employers to voting against equal pay for women, Ayotte has continually voted directly against the interests of New Hampshire families.”
“Despite Ayotte’s attempts to cover up her record with sham bills that have nice titles but would actually do damage to New Hampshire families, voters will see right through her transparent attempts to save her political career and hold her accountable for her real Washington record,” added Buckley.
See below for the facts on Kelly Ayotte’s record of opposing efforts to help working families:
Ayotte said she “certainly” thinks guaranteed paid leave is “an issue that should be addressed by employers rather than mandated by the government.”
And she followed up those comments by introducing a sham paid leave bill with Mitch McConnell that would actually force workers to choose between overtime pay and leave time, a proposal which experts have called an “empty promise” that “would give workers less flexibility and less pay.” Others have pointed out it’s a “Trojan horse” that means “ripping off workers.”
When asked why she voted against equal pay for women, Ayotte said, “The reason that I voted against that specific bill is that, I looked at it, and there were already existing laws that need to be enforced.”
So instead of supporting the Paycheck Fairness Act, Ayotte introduced a deeply flawed equal pay bill that creates loopholes for employers to prohibit discussion of pay.
For additional facts about Ayotte’s record on women’s economic issues, see here.
6. Funny-Money-Frank "On Notice"
Emily’s List Puts NH Congressman Frank Guinta “On Notice”
by NH Labor News, nhlabornews.com, October 23, 2015
In addition to being one of the most corrupt members of Congress, Frank Guinta is also one of the worst when it comes to supporting policies that are dangerous to women and families.
Here are six reasons why EMILY’s List is putting Congressman Frank Guinta “On Notice”:
- Guinta Supported an Abortion Ban. In May 2015, Guinta voted for a bill that would prohibit abortions in cases where the probable age of the fetus is 20 weeks or later and would impose criminal penalties on doctors who violate the ban. It would provide exceptions for cases in which the woman’s life is in danger as well as for pregnancies that are a result of rape if, as amended, for pregnancies that are a result of rape against an adult woman, the woman received counseling or medical treatment for the rape at least 48 hours prior to the abortion. An exception would be provided for pregnancies resulting from rape or incest against a minor if the rape or incest had been previously reported to law enforcement or another government agency authorized to act on reports of child abuse. [HR 36, Vote #223, 5/13/15;CQ Floor Votes]
- Guinta Supported Ban of Abortion with “No Exceptions.” “In response to two questions on abortion, Guinta said he is pro-life, and, were a repeal to Roe v. Wade come up while he was serving in Congress, he would vote for a no-holds barred ban on abortion with ‘no exceptions.’” [Foster’s Daily Democrat, 8/11/10]
- Guinta Cosponsored Legislation That Would Allow Employers to Deny Birth Control Coverage. In February 2012, Guinta cosponsored the Respect for Rights of Conscience Act, which would “permit a health plan to decline coverage of specific items and services that are contrary to the religious beliefs of the sponsor, issuer, or other entity offering the plan or the purchaser or beneficiary.” [HR 1179, 2/08/12]
- Guinta Found Guilty of Violating Campaign Finance Laws by the FEC, Fined $15,000. “After five years of denying allegations of wrongdoing related to his 2010 campaign, Guinta was found by the Federal Election Commission to have violated campaign finance laws by accepting $355,000 in illegal contributions from his parents. The two-term congressman, who was defeated in 2012 but narrowly beat Democratic Rep. Carol Shea-Porter in 2014, has said the money he used for his first campaign was also his, though disclosure forms suggested he didn’t have the money. Guinta maintained he made a reporting error and did nothing illegal. Now, he must refund the six-figure sum to his parents, and pay a $15,000 fine.” [Roll Call, 5/18/15]
- Guinta Voted Multiple Times Against Raising the State Minimum Wage in New Hampshire. During his time in the New Hampshire state House, Guinta voted multiple times against raising the state’s minimum wage. In April 2001, Guinta voted against a bill that would have increased New Hampshire’s minimum wage. The bill increased the minimum wage from $5.15 per hour to $5.65 as of October 1, 2001. It then increased the wage to $6.15 on October 1, 2002. Guinta’s vote was in favor of a report by the Labor Committee declaring the bill ‘inexpedient to legislate,’ effectively killing the bill. The report killing the bill passed 170-163. A motion was made to again declare the bill ‘inexpedient to legislate,’ effectively killing the wage increase. Guinta voted in favor of the motion to kill the bill, which failed 166-184. Finally, a motion was made to approve the bill. Guinta voted against the bill, which passed 196-153. [HB 469, Vote #92, 4/26/01;HB 469, Vote #117, 5/17/01; HB 469, Vote #118, 5/17/01]
- Guinta Named One of CREW’s Most Corrupt Members of Congress in 2010. “Most Corrupt: Representative Frank Guinta. Representative Frank Guinta (R-NH) is a first-term member of Congress, representing New Hampshire’s 1stcongressional district. Rep. Guinta’s ethics issues stem from his failure to accurately disclose assets on his personal financial disclosure forms and possibly accepting improper gifts or loans.” [CREW, 2010]
7. The Key Senate Race
New Hampshire US Senate race is ground zero for women’s issues
by James Pindell, bostonglobe.com, October 23, 2015
New Hampshire’s Senate race — a high-stakes contest between two of the state’s most prominent female politicians — has already become ground zero in the national fight over women’s issues.
The race is less than three weeks old, but already Senator Kelly Ayotte, a Republican, and Governor Maggie Hassan, a Democrat, as well as several outside interest groups and super PACs, are quickly trying to define these issues for voters in their own terms.
When a Karl Rove-backed super PAC went up with more than $1 million in flattering television ads about Ayotte’s record on women, the local Planned Parenthood’s political arm responded. After EMILY’s List, a national organization that supports female Democrats who back abortion rights, announced it would be heavily involved in the contest, Ayotte released her first three Web videostitled, “Our Daughters,” “Workplace Fairness,” and “Strong Families.”
The Senate race is on track to be one of the most competitive in the country in 2016. Democrats must win this seat in order to net the handful they need to secure control of the Senate. On Wednesday, a Public Policy Polling survey found the race to be a statistical tie, with Hassan at 44 percent and Ayotte at 43 percent.
In recent years, Democrats have focused their national campaigns on galvanizing female voters, accusing Republicans of waging a “war on women.” But the party’s playbook has never worked against a female incumbent in the Senate — at least not yet.
“The ways the two campaigns are interpreting these women’s issues are different,” said Daniel Schlozman, a political science professor at Johns Hopkins University. “Ayotte has clearly seen the polling on abortion and is trying to reframe what it means to be pro-woman. Everyone is pro-woman like everyone is pro-economy, but the answers on how to go about it, are very, very different. That is what makes this particular race among two popular women so interesting.”
In the run-up to her reelection campaign, Ayotte worked with a bipartisan group of senators to address sexual assault on college campuses. She introduced a bill that would increase access to birth control over the counter. She said she wants employers to provide accommodating workplaces for pregnant women and flexible schedules for new mothers.
“Kelly’s long record of supporting women and families is clear,” said Ayotte spokeswoman Chloe Rockow.
Democrats, meanwhile, called into question the seriousness of Ayotte’s legislative efforts. New Hampshire Democratic National Committeewoman Kathy Sullivan described them as “a sham.”
EMILY’s List targets Ayotte’s voting record, including opposing an equal pay bill and supporting an amendment that allow let privately held companies opt out of mandated contraception benefits in health insurance plans based on a moral or religious objection.
“Democrats are emboldened to use so-called women’s issues on the campaign trail, especially on choice,” said Nathan Gonzales, the editor & publisher of The Rothenberg & Gonzales Political Report, a nonpartisan political newsletter. “It is clear that they aren’t going to give Ayotte a pass just because she is a woman.”
And if there’s one issue that each campaign plans to use against the other, it’s government funding for Planned Parenthood. Ayotte has voted three times to not have any government funds go to Planned Parenthood. She’s also called out the women’s health organization following videos surreptitiously recorded by an antiabortion group this year that showed Planned Parenthood staff talking about tissue research conducted on aborted fetuses.
Meanwhile Hassan, as governor, defended Planned Parenthood in a state-level effort to defund it. She ultimately lost that battle.
“I think this race will push the dialogue beyond these issues, but there is no doubt that on Planned Parenthood, there is a line in the sand,” said Kelly Dittmar, a Rutgers University political science scholar at the Center for American Women and Politics. “They both bring a woman’s perspective on women’s issues, but there isn’t a monolithic position on them. This race will push us to think beyond the box about what it means to be a women candidate, and that it is a bit more nuanced.”
Dittmar’s research shows that this is only the 10th time two women have squared off for the Senate. None of those races featured a sitting governor versus an incumbent. So far, there are 11 other women running for the Senate in 2016.
But while women’s issues are at the forefront of this race, that may not always be the case.
“At the end of the day, this race will be about the bread-and-butter issues like the heroin epidemic in the state, the economy, and foreign policy,” said New Hampshire-based Republican strategist Dave Carney, who is overseeing the super PAC Ending Spending’s work on the race in support of Ayotte.
What’s more, staffers working for both candidates generally agree on one thing: Their race does not exist in a vacuum. The winner will undoubtedly be affected by the presidential contest on top of the ballot, as well as a now open gubernatorial race and a competitive race in one House district.
In fact, how much attention voters pay to women’s issues could depend on the party’s presidential nominees, especially if Hillary Clinton tops the Democrats’ national ticket.
Plus, Hassan and Ayotte will want to discuss other issues they believe are in their wheelhouse. Hassan will want to talk about being bipartisan and balanced budgets. Ayotte will want to talk about foreign policy issues, like the Iran nuclear deal.
It is also possible that primary challengers could emerge in either party. Ayotte has had a rough relationship with the Republican grass roots since her office successfully organized a coup against then New Hampshire Republican Party chairman Jack Kimball, a Tea Party leader, four years ago.
Kimball said Ayotte will face a primary challenger who is more conservative “and with the ability to win.” But Kimball said he wasn’t comfortable giving a name — or even the gender of the candidate.
“But, yes, I do think the Planned Parenthood thing is going to be big,” Kimball said.
AND NATIONALLY
8. Budget Myths
5 myths about the budget
by Michael Grunwald, politico.com, October 21, 2015
Washington is preparing for another partisan clash over federal spending. In fact, the Obama era has been a series of partisan clashes over federal spending—the stimulus battle in 2009, the debt-limit crisis in 2011, the “fiscal cliff” in 2012, the government shutdown in 2013. They are always noisy. They are always tense. And they are always confusing because Americans don’t really understand how their tax dollars are spent.
You don’t need to be a budget wonk to get the gist of the budget wars.
You don’t need to know about reconciliation or sequestration, outlays or out years, the trust fund or the doc fix. You just need to know a few basics so that you don’t think a quarter of all federal spending goes to foreign aid—which, incidentally, is exactly what the polls say most people think. As confusing as the budget can be, the broad strokes are pretty simple. You just have to get past a few common myths:
MYTH 1: The government pours your money into porky boondoggles and random programs.
The U.S. spent about $3.7 trillion in the fiscal year that just ended, about $12,000 for every American. The first thing to know about that spending is that about two-thirds of it, nearly $2.5 trillion, went to Social Security, Medicare and other health programs, and the military. The old joke about how the federal government is an insurance company with an army is not really a joke.
The next largest budget item was just $229 billion, the interest we paid on our national debt.
Everything else the U.S. government funded—farm subsidies, food stamps, flood control, the Federal Aviation Administration, the Fish and Wildlife Service, FBI investigations and FEMA disaster responses as well as foreign aid—took up less than 30 cents of every taxpayer dollar. Foreign aid actually took up less than one cent. Popular priorities like national parks and Head Start and the Border Patrol were basically rounding errors. It’s not like the bulk of your hard-earned cash is funding bridges to nowhere, rabbit massages, congressional junkets or Solyndra-style failures, either. The big money goes to the Pentagon and the elderly.
MYTH 2: “Spending” means the annual budget.
Another way to think about the vast gap between the spending we fight over and the spending we ignore is to see how much Congress appropriates through its annual budget process. For 2015, it was just $1.1 trillion. The rest of the spending was “mandatory,” a telling Beltway description of dollars that go out the door automatically unless Congress decides to stop them. This autopilot situation is definitely not an optimal way to run a multi-trillion-dollar spending operation, and when fiscal conservatives say they want to rein in "entitlements," they're talking about mandatory spending programs.
Mandatory spending includes some veteran benefits, unemployment benefits, food stamps, and even transportation dollars. But the vast majority of it is Social Security and Medicare, our beloved entitlement programs for senior citizens, along with Medicaid, our main health care entitlement for low-income families. Budget hawks freak out about these entitlements because U.S. demographics are skewing older, which means fewer workers will be financing benefits for more elderly retirees, and because health care costs have been increasing for years.
Hold that thought for a moment. For now, the key point is that the discretionary spending that inspires so much warfare in Washington is just a small chunk of federal spending—and more than half of it goes to the Pentagon. Just 13 percent of the 2015 budget was “non-defense discretionary,” a bucket including education, science, the environment, housing, energy, the National Weather Service, the National Endowment for the Arts, that porky local boondoggle named for your former congressman and just about anything else that doesn’t involve defense, health care or old-age pensions.
MYTH 3: The government is rapidly going bankrupt.
The government spent $439 billion more than it raised in taxes in 2015. That sounds bad, but that deficit was almost $1 trillion less than it was in 2009, when revenues plunged and spending spiked after the financial crisis. Back then, the deficit was a terrifying 9.8 percent of GDP; now it’s 2.5 percent, which is considered stable when the economy and the population are growing. Although budget hawks savaged President Barack Obama and congressional Republicans for failing to adopt the Simpson-Bowles deficit reduction plan, America has almost achieved the 2015 Simpson-Bowles target of 2.3 percent of GDP, anyway. The U.S. is not Greece, and is in no imminent danger of becoming Greece.
If Washington is so irresponsible, why is our fiscal position getting better? The biggest factor driving down the deficit has been the improving economy: Individuals and businesses pay more taxes when they have jobs and profits. Obama raised additional revenue through tax hikes on the wealthy in Obamacare and the “fiscal cliff” budget deal of 2013. On the spending side, the slow wind-down of wars in Iraq and Afghanistan has saved some money. And thanks to Republican threats to force the U.S. government into default in 2011 if Obama didn’t accept some austerity on the spending side, the Budget Control Act that resolved the standoff is slashing spending by a remarkable $2.5 trillion over a decade.
Higher taxes for high earners (Obama's victory) plus lower spending (a Republican victory) equals lower deficits. Now the only real short-term danger is that Washington dysfunction and brinksmanship could force the Treasury into default. Congress has two weeks to raise the federal debt ceiling so the government can pay for stuff it has already bought, but Republicans want to use the deadline as another opportunity to extract concessions. Obama has said he is done horse-trading over the full faith and credit of the United States. We’ll see. A default would be spectacularly catastrophic, but at a time when House Republicans can’t agree on a speaker or just about anything else, it’s not exactly unimaginable.
MYTH 4: The government is slowly going bankrupt.
The deficit is shrinking, but since outflow still exceeds inflow, we still have to borrow to make up the difference, and our $18 trillion debt is still growing. It has shrunk slightly as a portion of the economy, to about 74 percent of GDP, but that’s still an awful lot of money for a nation to owe; a century ago, the entire federal government spent just $1 billion a year. Meanwhile, the Congressional Budget Office has forecast that annual deficits will start growing again soon. And the retirement of the Baby Boomers (combined with the trend toward greater longevity) will put heavy pressure on entitlement spending in the coming decades.
That’s why fiscal Chicken Littles can produce alarming 75-year budget forecasts. Honestly, though, nobody has any clue what will happen to the country over the next 75 years. Abraham Lincoln didn’t budget for the Great Depression. FDR didn’t anticipate 9/11. That said, there has been one very significant piece of long-term budget news during the Obama era: The cost of health care, which was the most serious threat to fiscal sustainability, is no longer soaring. In 2009, the CBO expected Medicare spending to jump from 3 percent to 6 percent of GDP by 2030; it now expects much more limited growth to less than 4 percent of GDP. That is a huge difference, worth trillions of dollars over time.
Our fiscal position decades from now will depend on economic performance, interest rates, military entanglements and a bunch of stuff that would never occur to us today. It will depend on whether we want government to do more or less than it does now, and whether we’re willing to collect the taxes needed to pay for it. But it will also depend on the cost of health care. If Obamacare really does control costs, the well-armed insurance company we call the U.S. government will be a lot cheaper to maintain.
MYTH 5: Spending is just the stuff labeled “spending.”
That’s the budget in a nutshell. Most of the $3.7 trillion we spend gets funneled into the military-industrial and medical-industrial complexes. Most of the spending is virtually automatic. The deficit is shrinking. The debt is growing. We have a serious demographic problem. We had a serious health care problem, but it looks like it won’t be as bad as we thought.
Of course, it’s not really that simple. For example, that $3.7 trillion spending number doesn’t include another $1.3 trillion worth of “tax expenditures,” basically spending disguised as tax breaks. Predictably, the biggest one is the tax deduction for employer-paid health insurance, which cost the Treasury $150 billion in lost revenue last year, followed by tax-deductible contributions to pensions and retirement plans. But there are also sizable tax expenditures for mortgages, children, charitable donations, tuition and earned income for the working poor that don’t fit neatly into the general spending narrative.
Another twist: Sometimes the government loans money rather than spend it. Uncle Sam now has a $3.3 trillion credit portfolio, and the vagaries of federal accounting tend to hide its true cost. For example, the Department of Education loans students more than $100 billion a year and the Federal Housing Administration insures more than $100 billion worth of mortgages. But the government books a profit on those programs, so they don’t show up as spending. The nationalization of Fannie Mae and Freddie Mac is also artificially reducing the deficit since the government gets to keep their profits.
But nuance can be overrated. The budgetary forest may be less compelling than some of its individual trees, and in the coming weeks there’s sure to be heated debate about Planned Parenthood, the Export-Import Bank and the Highway Trust Fund. But the big picture still holds. Our fiscal picture might be kind of a mess, but it’s not really a disaster. If we don’t do something stupid like default on our obligations, we should be just fine.
9. The Republican Welfare Myth
The Myth of Welfare’s Corrupting Influence on the Poor
by Eduardo Porter, nytimes.com, October 20, 2015
Does welfare corrupt the poor?
Few ideas are so deeply ingrained in the American popular imagination as the belief that government aid for poor people will just encourage bad behavior.
The proposition is particularly cherished on the conservative end of the spectrum, articulated with verve by Charles Murray of the American Enterprise Institute, who blamed welfare for everything from higher youth unemployment to increases in “illegitimacy.” His views are shared, to a greater or lesser degree, by Republican politicians like the unsuccessful presidential candidate Mitt Romney and Paul Ryan, the chairman of the House Ways and Means Committee.
But even Franklin Delano Roosevelt, the father of the New Deal, called welfare “a narcotic, a subtle destroyer of the human spirit.” And it was President Bill Clinton, a Democrat, who put an end to “welfare as we know it.”
Today, almost 20 years after Mr. Clinton signed a law that stopped the federal entitlement to cash assistance for low-income families with children, the argument has solidified into a core tenet influencing social policy not only in the United States but also around the world.
And yet, to a significant degree, it is wrong. Actual experience, from the richest country in the world to some of the poorest places on the planet, suggests that cash assistance can be of enormous help for the poor. And freeing them from what President Ronald Reagan memorably termed the “spider’s web of dependency” — also known as forcing the poor to swim or sink — is not the cure-all for social ills its supporters claim.
One billion people in developing countries participate in a social safety net. At least one type of unconditional cash assistance is used in 119 countries. In 52 other countries, cash transfers are conditioned on relatively benign requirements like parents’ enrolling their children in school.
Abhijit Banerjee, a director of the Poverty Action Lab at the Massachusetts Institute of Technology, released a paper with three colleagues last week that carefully assessed the effects of seven cash-transfer programs in Mexico, Morocco, Honduras, Nicaragua, the Philippines and Indonesia. It found “no systematic evidence that cash transfer programs discourage work.”
A World Bank report from 2014 examined cash assistance programs in Africa, Asia and Latin America and found, contrary to popular stereotype, the money was not typically squandered on things like alcohol and tobacco.
Still, Professor Banerjee observed, in many countries, “we encounter the idea that handouts will make people lazy.”
Professor Banerjee suggests the spread of welfare aversion around the world might be an American confection. “Many governments have economic advisers with degrees from the United States who share the same ideology,” he said. “Ideology is much more pervasive than the facts.”
What is most perplexing is that the United States’ own experience with both welfare and its “reform” does not really support the charges.
Take births to single mothers. Already in 1995, an analysis of rates of birth to unwed mothers by Hilary Hoynes of the University of California, Berkeley, found that welfare payments did not increase single motherhood. And the experience over the next 20 years suggested that ending welfare did not reduce it.
The charge that welfare will become a way of life reproducing itself down the generations is also dubious. Before welfare reform in 1996, some four in 10 Americans on welfare were on it for only one or two years. Only about a third were on it for five years or more.
And what about jobs? There is little doubt that welfare can discourage employment, particularly when recipients lose benefits quickly as their earnings from work rise.
Still, the effects are muted. For instance, in 1983 Robert Moffitt, then at Rutgers University, estimated that welfare reduced work by some four hours a week out of a total of 25.
“There is some disincentive effect consistent with theory, but the economic magnitude is not large,” said James P. Ziliak, head of the Center for Poverty Research at the University of Kentucky. “Oftentimes these disincentive effects are overstated in the policy discourse.”
On the other hand, welfare provides very tangible benefits. New research shows that more cash welfare early in a child’s life improves the child’s longevity, educational attainment and nutritional status, and income in adulthood.
What did the United States achieve with welfare reform?
Its core objective — getting the poor into jobs — was laudable. In the early years, the effects seemed almost too good to believe. The number of families on welfare plummeted. The labor supply of single mothers soared. Child poverty declined sharply.
But the cheering faded. Over time the labor supply of less-educated single mothers, those with at most a high school education, returned to its earlier level. Poverty rebounded, as did births outside marriage.
After the fact, many independent researchers concluded that the strong economy of the late 1990s, combined with bigger wage subsidies through an expanded earned-income tax credit, deserved most of the credit for the improvement. Meanwhile, pushing the poor off welfare — replacing the entitlement to cash assistance with limited state-run programs that sharply curtailed access to aid for all sorts of reasons — had definite costs, borne by the poorest of the poor.
“What we lost is a commitment to the poor who face significant barriers to work, whether because of child care or physical or mental disabilities,” Mr. Ziliak said. “We have walked away from cash for that group and that group has suffered considerably.”
When the Great Recession struck, many of the poorest Americans foundthere was no safety net for them. “Extreme poverty was more affected by the shock to the labor market than in prior experience,” said Professor Hoynes at Berkeley.
Why is this debate still relevant today? The evidence has not caught up with the popular belief that welfare reform was a huge success.
The old welfare strategy Mr. Murray blamed for so many social ills died long ago. Its replacement is tiny by comparison, providing cash to only about a quarter of poor families and typically only enough to take them a quarter of the way out of poverty.
Still, it remains under siege. And the arguments against it are pretty much the same that President Reagan made 30 years ago.
Representative Ryan has been promoting a plan he drafted last year that would substitute most remaining federal assistance programs with block grants to states and impose tough work requirements on beneficiaries.
“Rather than just treating the symptoms of poverty,” he said last month, “our goal must be to help people move from welfare into work and self-sufficiency.”
Before the United States goes down that road again, however, it might make sense to reassess the strength of the underlying argument: that poor people will never act responsibly, get a job and stay in a family unless they are thrown into the swimming pool and left to struggle with little support from the rest of us.
FINALLY two from the Republican House
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