John Hendrickson and Vance Ginn: Learning from the champions of fiscal conservatism
Government spending is at the heart of sound public policy. But out-of-control spending for decades has created substantial economic destruction and ongoing threats that must be remedied before things get worse. Fortunately, we have examples of how fiscal rules can solve this problem. We must put these rules into place before our economy gets any worse. Excessive federal government spending has created mounting budget deficits that have driven the national debt to $30 trillion. This debt has given the Federal Reserve the ammunition to use to recklessly print money, resulting in the highest inflation in 40 years. And inflation destroys our purchasing power as it is a hidden tax that erodes our livelihoods. Controlling spending takes discipline, and applying fiscal rules can help. Policymakers should follow the examples of a century ago in Presidents Warren G. Harding and Calvin Coolidge, who demonstrated that controlling spending and cutting the debt is possible. President Harding assumed office in 1921 when the nation was suffering an overlooked severe economic depression. Hampering growth were high-income tax rates and a large national debt after World War I. Congress passed the Budget and Accounting Act of 1921 to reform the budget process, which also created the Bureau of the Budget (BOB) at the U.S. Treasury Department (which was changed in 1970 to the Office of Management and Budget in the Executive Office of the President). President Harding’s chief economic policy was to rein in spending, reduce tax rates, and pay down debt. Harding, and later Coolidge, understood that any meaningful cuts in taxes and debt couldn’t happen without reducing spending. Charles G. Dawes was selected by Harding to serve as the first BOB Director. Dawes shared the Harding and Coolidge view of “economy in government.” In fulfilling Harding’s goal of reducing expenditures, Dawes understood the difficulty in cutting government spending as he described the task as similar to “having a toothpick with which to tunnel Pike’s Peak.” To meet the objectives of spending relief, the Harding administration held a series of meetings under the Business Organization of the Government (BOG) to make its objectives known. “The present administration is committed to a period of economy in government…There is not a menace in the world today like that of growing public indebtedness and mounting public expenditures…We want to reverse things,” explained Harding. Not only was Harding successful in this first endeavor to reduce government expenditures, his efforts resulted in “over $1.5 billion less than actual expenditures for the year 1921.” Dawes stated: “One cannot successfully preach economy without practicing it. Of the appropriation of $225,000, we spent only $120,313.54 in the year’s work. We took our own medicine.” Overall, Harding achieved a significant reduction in spending. “Federal spending was cut from $6.3 billion in 1920 to $5 billion in 1921 and $3.2 billion in 1922,” noted Jim Powell, a senior fellow at CATO Institute. Harding and the Republican Party viewed a balanced budget as not only good for the economy, but also as a moral virtue. Dawes’s successor was Herbert M. Lord, and just as with the Harding Administration, the BOG meetings were still held on a regular basis. President Coolidge and Director Lord met regularly to ensure their goal of cutting spending was achieved. Coolidge emphasized the need to continue reducing expenditures and tax rates. He regarded “a good budget as among the most noblest monuments of virtue.” Coolidge noted that a purpose of government was “securing greater efficiency in government by the application of the principles of the constructive economy, in order that there may be a reduction of the burden of taxation now borne by the American people. The object sought is not merely a cutting down of public expenditures. That is only the means. Tax reduction is the end.” “Government extravagance is not only contrary to the whole teaching of our Constitution, but violates the fundamental conceptions and the very genius of American institutions,” stated Coolidge. When Coolidge assumed office after the death of Harding in August 1923, the federal budget was $3.14 billion and by 1928 when he left, the budget was $2.96 billion. Altogether, spending and taxes were cut in about half during the 1920s, leading to budget surpluses throughout the decade that helped cut the national debt. The decade had started in depression and by 1923, the national economy was booming with low unemployment. If this conservative budgeting approach – which was tied with sound monetary policy for most of the period – had been continued, the Great Depression may not have happened. Officials at every level of government today should learn from this extraordinary lesson that fiscal restraint supports more economic activity as more money stays in the productive private sector. With spending out of control at the federal level, and in many states and local governments, the time is now for spending restraint and strong fiscal rules to set the stage for more economic prosperity today and for generations to come. John Hendrickson is the Policy Director at Iowans for Tax Relief Foundation. Vance Ginn, Ph.D., is chief economist at the Texas Public Policy Foundation, and is the former associate director for economic policy at the White House’s Office of Management and Budget, 2019-20. Republished with the permission of The Center Square.
The 2022 World Games will showcase Alabama
Allow me to deviate from politics to discuss an important event for our state. The World Games 2022 will place Birmingham and the entire state of Alabama squarely in the global spotlight. Believe it or not, this once-in-a-lifetime event is only a few months away with approximately 3,600 athletes from more than 100 countries and up to 500,000 visitors expected to flood Birmingham for one of the world’s largest athletic competitions. Folks, there are many questions about the World Games 2022. Is it the biggest sports party in state history? Is it a way to reconnect humanity in the wake of the COVID-19 pandemic? Is it a chance for sports fans to witness history? Is it a showcase for Birmingham that can elevate and enhance the city’s and state’s image? This is Birmingham’s gold medal moment. It is a moment to show the world that the story of Birmingham and the entire State of Alabama is the story of perseverance and triumph. It is a moment we will remember with pride for the rest of our lives. So, what is The World Games which is happening July 7-17 in Birmingham? The easy answer is it is “the new generation of global sport competition,” organized with the support of the International Olympic Committee. These are the fastest-growing sports in the world, and several of them compete on the Summer Olympic platform, also. So, we will have a lot of the Olympians that competed in Tokyo last summer competing again here. Elite athletes from all over the world will converge in Birmingham to participate in 34 sporting competitions at over 25 venues around the metro area. It is also so much more. The schedule includes mainstream sports that many Alabamians have heard of, like flag football presented by the NFL, softball, lacrosse, bowling, waterski jumping and wakeboarding, and sumo wrestling. Fans will also enjoy emerging sports like parkour, sport climbing, drone racing, and canopy piloting. There are multiple disciplines of dance sports, as well as many different types of martial arts, including Muay Thai and Jiu-jitsu. Don’t forget about sports that most Alabamians have never encountered, such as floorball, korfball, beach handball, and tug of war. The sports program also includes wheelchair rugby, making The World Games 2022 making the first multi-sport international competition to include an adaptive sport as part of the regular sports program. Alabama is filled with sports fans, and The World Games truly has something for anyone and everyone to enjoy. As more and more people in Alabama and beyond learn about The World Games, organizers face another question: What impact will The World Games have on Birmingham and the State of Alabama? Alabama will welcome the world to the biggest athletic event in the Southeastern United States since the Atlanta Olympics in 1986. Our renowned southern hospitality will be on full display. Visitors from around the world will be exposed to Birmingham’s vibrant food scene. They will see a city and state no longer defined by the brutal black-and-white images from the 1960s but a place that has grown and matured. The Opening Ceremonies promise to showcase Birmingham on the global stage. That is why local, state, and national leaders have come together to support the World Games 2022. The business community in Alabama, especially Birmingham, is fully engaged. Folks, remember, this is the first time the event has been held in the United States in more than 40 years, and Birmingham is the perfect place to bring the world back to America. Birmingham’s story is America’s story – built on hard work, perseverance, and teamwork. “I believe Birmingham and the entire State of Alabama is going to show up in a big way on the global stage,” says Nick Sellers, Chairman of the World Games 2022. The World Games 2022 gives Birmingham and Alabama a true chance to shine. See you next week. Steve Flowers is Alabama’s leading political columnist. His weekly column appears in over 60 Alabama newspapers. He served 16 years in the state legislature. Steve may be reached at: www.steveflowers.us.
Ross Marchand: Overlooked postal ‘reform’ provision spells trouble for USPS
The United States Postal Service (USPS) isn’t exactly known for its financial acumen. The agency has lost more than $90 billion over the past 15 years, including nearly $15 billion since the start of the pandemic. Delivery speeds have rebounded since the middle of 2020, and the agency has a historic amount of cash-on-hand, but leadership has failed to stop the fiscal bleeding. And now, lawmakers are set to make things even worse by passing the deeply misguided H.R. 3076, the Postal Service Reform Act of 2021. This bundle of changes would shift retirement costs around and put the USPS on the hook for ill-defined “nonpostal services.” Congress should steer clear of H.R. 3076 and work toward genuine postal reform. The Postal Service Reform Act would change plenty about how the USPS operates. The most widely discussed change is the “integration” of retiree health benefits into Medicare. The legislation would split the existing Federal Employees Health Benefits (FEHB) program, which covers about 8 million federal and postal workers, retirees, and family members, into two. Out of this divorce would emerge a new general FEHB and a separate Postal Service Health Benefits (PSHB) Program linked financially to the Medicare program. Virtually all USPS employees would eventually be covered by Medicare, absolving America’s mail carrier of considerable healthcare costs. This “reform” does little, though, to actually save taxpayer money. It merely shifts a costly burden from one federal agency to another. Medicare expenditures now total more than $800 billion per year, and the program’s main trust fund is expected to hit insolvency by 2026. Adding postal retirement liabilities onto an already-bloated program seems like an odd way to keep costs under control. The grand Medicare “fix” receives far more attention than an even more alarming provision of the postal proposal. Section 103 of the act authorizes the USPS to “establish a program to enter into agreements with an agency of any State government, local government, or tribal government to provide property and services on behalf of such agencies for non-commercial products and services…” The limited-sounding scope of the provision seems to rule out the possibility that the USPS will take up banking (which many agency watchers reasonably feared). In reality, the legislative language gives the USPS wide license to dabble in banking and other problematic endeavors. To see how, consider that states such as New Jersey and California have been toying around with the idea of opening public sector banks. In 2019, California Gov. Gavin Newsom (D) signed into law a bill allowing counties and cities to create their own financial institutions that could take deposits and facilitate certain low-interest loans. And, New Jersey has been busy studying the implementation of its own public banking initiatives. One problem for public officials is cost. If taxpayer-funded banks provide inexpensive financial services, that money must come from somewhere. Enter the USPS, which can grab taxpayer subsidies and low-interest Treasury loans if it fails to balance its books. If H.R. 3076 becomes the law of the land, expect states and localities to try and partner up with the federal agency to provide ostensibly “non-commercial” financial services. And, if the USPS’ check-cashing pilot is any indication, expect that effort to end in disaster. If lawmakers really want the USPS to get back into the black, they’ll need to push the agency to focus on its core strength … delivering the mail. This will mean adequately pricing packages to ensure that artificially cheap parcels don’t swamp mail volumes and slow down mail delivery. There’s some promising language in H.R. 3076 ordering the Postal Regulatory Commission to review how products are priced. But, this will accomplish little if all the other problematic provisions become law. The USPS can continue delivering for the American people, but only if lawmakers avoid the misguided policies contained in postal “reform” legislation. Ross Marchand is a senior fellow for the Taxpayers Protection Alliance.
High court’s Alabama ruling sparks alarm over voting rights
The Supreme Court’s decision to halt efforts to create a second mostly Black congressional district in Alabama for the 2022 election sparked fresh warnings Tuesday that the court is becoming too politicized, eroding the Voting Rights Act and reviving the need for Congress to intervene. The Supreme Court’s conservative majority put on hold a lower court ruling that Alabama must draw new congressional districts to increase Black voting power. Civil rights groups had argued that the state, with its “sordid record” of racial discrimination, drew new maps by “packing” Black voters into one single district and “cracking” Black voters from other districts in ways that dilute their electoral power. Black voters are 26% of Alabama’s electorate. In its 5-4 decision late Monday, the Supreme Court said it would review the case in full, a future legal showdown in the months to come that voting advocates fear could further gut the protections in the landmark Civil Rights-era law. It’s “the latest example of the Supreme Court hacking away at the protections of the voting rights act of 1965,” said Sen. Dick Durbin, D-Ill., chairman of the Judiciary Committee. “Congress must act. We must restore the Voting Rights Act.” The outcome all but ensures Alabama will continue to send mostly white Republicans to Washington after this fall’s midterm elections and applies new pressure on Congress to shore up voter protections after a broader elections bill collapsed last month. And the decision shows the growing power of the high court’s conservative majority as President Joe Biden is under his own pressures to name a liberal nominee to replace retiring Justice Stephen Breyer. Rep. Terri Sewell, the only Black representative from Alabama, said the court’s decision underscores the need for Congress to pass her bill, the John R. Lewis Voting Rights Advancement Act, to update and ensure the law’s historic protections. “Black Alabamians deserve nothing less,” Sewell said in a statement. The case out of Alabama is one of the most important legal tests of the new congressional maps stemming from the 2020 census count. It comes in the aftermath of court decisions that have widely been viewed as chiseling away at race-based protections of the Voting Rights Act. Alabama and other states with a known history of voting rights violations were no longer under federal oversight, or “preclearance,” from the Justice Department for changes to their election practices after the court, in its 2013 Shelby v. Holder decision, struck down the bill’s formula as outdated. As states nationwide adjust their congressional districts to fit population and demographic data, Alabama’s Republican-led Legislature drew up new maps last fall that were immediately challenged by civil rights groups on behalf of Black voters in the state. Late last month, a three-judge lower court, which includes two judges appointed by former President Donald Trump, had ruled that the state had probably violated the federal Voting Rights Act by diluting the political power of Black voters. This finding was rooted, in part, in the fact that the state did not create a second district in which Black voters made up a majority or close to it. Given that more than one person in four in Alabama is Black, the plaintiffs had argued the single Black district is far less than one person, one vote. “Black voters have less opportunity than other Alabamians to elect candidates of their choice to Congress,” the three-judge panel wrote in the 225-page ruling. The lower court gave the Alabama legislature until Friday to come up with a remedial plan. Late Monday, the Supreme Court, after an appeal from Alabama, issued a stay. Justices Brett Kavanaugh and Samuel Alito, part of the conservative majority, said the lower court’s order for a new map came too close to the 2022 election. Chief Justice John Roberts joined his three more liberal colleagues in dissent. “It’s just a really disturbing ruling,” said Sen. Cory Booker, D-N.J., a member of the Judiciary Committee, who called the Supreme Court’s decision “a setback to racial equity, to ideals of one person, one vote.” Rep. Joyce Beatty, D-Ohio, and the chair of the Congressional Black Caucus said the decision “hits at the guts of voting rights.” She told The Associated Press: “We’re afraid of what will happen from Alabama to Texas to Florida and even to the great state of Ohio.” White House Press Secretary Jen Psaki said the court decision exposes the need for Congress to legislate to protect voting rights. The erosion of those rights is “exactly what the Voting Rights Act is in place to prevent.” Critics went beyond assailing the decision at hand to assert that the court has become political. “I know the court likes to say it’s not partisan, that it’s apolitical, but this seems to be a very political decision,” said Democratic Sen. Chris Van Hollen of Maryland. Rep. Hakeem Jeffries, D-N.Y., tweeted that the court majority has “zero legitimacy.” Rep. Barbara Lee, D-Calif., tweeted that the court’s action was “Jim Crow 2.0.” Alabama Republicans welcomed the court’s decision. “It is great news,” said Rep. Mo Brooks, who is running for the GOP nomination for Senate. He called the lower court ruling an effort to “usurp” the decisions made by the state’s legislature. The justices will, at some later date, decide whether the map produced by the state violates the voting rights law, a case that could call into question “decades of this Court’s precedent” about Section 2 of the act, Justice Elena Kagan wrote in dissent. Section 2 prohibits racial and other discrimination in voting procedures. Voting advocates see the arguments ahead as a showdown over voting rights they say are being slowly but methodically altered by the Roberts court. The Supreme Court in the Shelby decision did away with the preclearance formula under Section 5 of the Voting Rights Act. And last summer, the conservative majority in Bronvich vs. the Democratic National Committee upheld voting limits in an Arizona case concerning early ballots that a lower court had found discriminatory under Section 2. With the Alabama case, the court
Bill seeks higher fines for taking down Confederate statues
A legislative committee advanced a proposal Tuesday to increase the fines on cities that take down Confederate monuments in Alabama. The Senate Governmental Affairs Committee advanced a bill by Republican Sen. Gerald Allen of Tuscaloosa that would increase the fine for violating the Alabama Memorial Preservation Act, which prohibits the removal and renaming of monuments and memorials that have stood for at least 40 years. The bill would increase the fine from a $25,000 one-time fee to a $5,000 per day fine that would accumulate until the monument is replaced. Allen said he believed the heftier fine would serve as a deterrent. Some Alabama cities have opted to pay the current $25,000 fine as part of the cost of taking down a Confederate monument “The fine will stay there until the monument, statue, street sign — whatever it may be — is replaced,” Allen told the committee. Sen. Linda Coleman-Madison, a Democrat from Birmingham, said she believed the $5,000 daily fine was excessive, particularly for smaller cities. “You are going up and up and up and up, and now you are in the punitive stage,” Coleman-Madison said of the total fines a city could face. While the Alabama Memorial Preservation Act does not mention Confederate monuments, it was enacted as some Southern states and cities began removing monuments and emblems of the Confederacy. Birmingham and several other cities have been fined under the law for taking down Confederate monuments. Most recently, the Alabama attorney general’s office told Montgomery officials that the city faces a $25,000 fine for renaming Jeff Davis Avenue for Fred Gray, a famed civil rights attorney who represented Rosa Parks and the Rev. Martin Luther King Jr. The bill also calls for the Alabama Historical Commission to design, construct and place a statue of the late civil rights leader John Lewis by the Edmund Pettus Bridge in Selma. Lewis, a native of Alabama who became a long-serving Georgia congressman, was beaten by state troopers on the bridge in a melee known as Bloody Sunday. The committee also advanced a bill that would make it a felony offense, punishable by up to 20 years in prison, to damage a historic monument while “participating in a riot, aggravated riot, or unlawful assembly.” Both bills now move to the full Alabama Senate. Republished with the permission of the Associated Press.
