The sequester in Indiana: Education
Too bad the Oscars came and went this past Sunday. On Monday, I downloaded and printed the White House's report on the impending sequester and its impact on the state of Indiana. If the other 49 states' reports are anything like Indiana's, then the Obama White House should be the early front-runners for the Best Original Screenplay statue.
The introduction contains some vintage Obama, such as saying that "There is no question that we need to cut the deficit..." Pretty ingenious coming from the guy who took a deficit and decided to give it steroids and a set of free weights. Another favorite is "The President has put forward a balanced plan to not only avoid the harmful effects of the sequester but also to reduce the deficit by more than $4 trillion in total."
The Obama White House insists the nation cannot afford a "self-inflicted wound from Washington," but at the same time, they expect you to take off the tourniquet, because they are pretty damned sure the bleeding has stopped. Not completely sure, but pretty damned sure...
Here's how the sequestration would affect teachers, schools, and education, according to the Obama administration:
If sequestration were to take effect, Indiana will lose approximately $13.8 million in funding for primary and secondary education, resulting in:
Okay. Some of those numbers look pretty grim, I suppose. They would probably look even worse if it weren't for the numbers running counter to this claim- the new Indiana state budget. Under the new two-year budget passed by the Indiana House and sent to the Senate on Monday, $13.809 billion is allocated for K-12 education. That is 63% of state spending right there, and it is for elementary, high school, and university education.
This includes increases of 2% percent the first year and 1% the second year, as well as maintained funding for full-time kindergarten. This works out to an extra $334 million over the next two years.
The budget, crafted by majority Republicans and passed along party lines 68-28, does not take into account the scheduled reductions in federal spending and represents a 10% increase from the current budget. The plan will leave the state with $2.1 billion in the bank at the end of Fiscal Year 2015.
Okay, so let me see if I have this straight...if the new budget passes, Indiana will be spending nearly $14 billion on education, and we are supposed to sweat nearly $14 million? We're talking about 1/100th of a percent. That is not even a penny on the dollar, and not exactly a head for the hills because the sky is falling kind of number, is it?
That also begs the question, why is Indiana even accepting federal education money? From the numbers in the proposed budget, the state has education funded, and then some. If they can find an extra $334 million over the next two years and still be in the black when the budget is completed, then no one is going to lose their job over not getting a grant from the federal government. If they do, then they are dealing with an unfortunate reality of government life- and that is dealing with a grant-based job.
Since the Republicans can't get their act together on a national level, it seems as though the Republican governors have been stepping up to the plate. Seeing this, one would think new Governor Mike Pence would look at the numbers, and without a second thought, refuse the money even if Indiana winds up receiving it.
There are a handful of elected officials, most notably Sen. Rand Paul, who give the unused portions of their office budgets back at the end of the year to make a point, and Pence could score a huge hit on the White House by just saying "no thanks, keep the cash. We got this."
Then again, I'm still waiting for someone, anyone (except Paul Krugman or Ben Bernanke) to explain what is more harmful about an $85 billion reduction in spending versus having a $16 trillion deficit.
I haven't waded particularly far into the second Obama administration, or its agenda thus far, but I did find it interesting President Obama mentioned increasing the minimum wage in the State of the Union speech. I did not find it overly surprising, because at what point shouldn't we stop gasping at this attempts at political theater from both sides of the aisle?
I have no doubt there will be a minimum wage increase eventually. I do not believe it is going to be the buck seventy-five the president wants, but probably eight bucks at least. That is, unless Obama gets tired of the perpetual logjam and just does it himself, somehow, like MacGyver escaping from an elevator by using a hockey ticket and a single human hair.
What really caught my eye was a guest editorial by a guy named Sid Mohn in last Friday's Springfield (Illinois) State Journal-Register. When you start off with the headline Raising the minimum wage isn't bad for business, you know you are in for something good.
Mohn begins by mentioning the same call for a minimum wage increase by Illinois Governor Pat Quinn in his recent State of the State speech, and then asserting than the data backs up a likely increase in jobs and money brought into the state's economy. Mohn also opines this would reduce taxpayer costs by moving workers out of poverty.
Facepalm. This sounds vaguely Democratic here. In Mohn's bio, he is listed as co-chairman of the Illinois Commission on the Elimination of Poverty. Well, there you go. Only a Democrat would think the solution to poverty is to throw money at it. I mean, the $13 trillion <--that says trillion, we have thrown at poverty has led to a continued and increased loss in the War on Poverty has not seemed to do much good, so raising the minimum wage, that will help? Capitalizing Poverty and goin' declarin' War (not just war, but War) has done as about as good as declaring War on Drugs, etc. If Poverty doesn't get its act together, President Obama might just declare WAR on it, and once you go full caps, there's no turning back.
After having already successfully lost me this far into his op/ed, Mohn continues his roll, saying that increasing minimum wage would "increase household spending, increase the demand for goods and help businesses grow," and that the Economic Policy Institute figures if the state's minimum wage was pushed to $10.65, it would infuse $2.5 billion into Illinois' economy.
What the hell did this guy study in college, because it sure wasn't economics, and I guessing he didn't spend a lot of time in logic class, either. I just took basic economics, and even I can tell this guy is a whole bunch of different Kool-Aids all at once. Suddenly increasing payroll costs for small businesses, especially those already caught in the crosshairs of Obamacare, will not, is not going to, and can not possibly increase job growth in a state already struggling with 8.7% unemployment. Also, keep in mind that Illinois recently increased the state income tax from 3% to 5%, which amounts to a 67% increase in the income tax rate. Who is really going to benefit from a higher minimum wage, except for the people pushing for it (none of whom are even on a first-name basis with a minimum wage)?
To help back his case, Mohn uses historical data from the Indiana Business Research Center from 2005, which shows job growth from private employers were not hit by a minimum wage increase, and Illinois achieved the second biggest rise in job growth in the Midwest. Fantastic. Glad the numbers were that good, eight years ago, during a different economy.
What this comes down to is when a minimum wage increase goes in, most small businesses will keep as many employees (presumably part-time) as they can under the new minimum, then the rest will cut loose- into that state with the 8.7% unemployment rate, leaving the rest to pick up the slack and still get the same amount of business done. Or, the employer will simply reduce their operating hours. Any way you slice it, the workers in Illinois are not going to be done any favors with this.
Granted, wages have not kept the pace with prices, and apparently the Obama administration is hoping that no will will notice they are ignoring the laws of supply and demand with the labor force, but there is a world of work that is going to have to be done first to minimize the damage from all this help you are trying to give the middle class.
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