Not satisfied by the billions in federal bailouts already passed, House Speaker Nancy Pelosi recently announced that she intendeds to bring the House back from the August recess to pass yet another multi-billion-dollar federal bailout. This version—costing taxpayers $26.1 billion—is touted as aid “to save teachers’ jobs, help seniors and children.” Perhaps anticipating a backlash against additional billion-dollar bailouts (the national debt recently polled on par with terrorism as threats to the United States), congressional Democrats were quick to claim that this would all be “paid for.”
Unfortunately, even a cursory look at the details reveals these claims for the gimmicks they are.
First, the bill will almost certainly not be paid for. The largest “cut” in spending is an $11.9 billion reduction in spending for the food stamp program, but this is directly at odds with information from the Huffington Post: “Democrats told HuffPost they will work to prevent the food stamp cuts from ever taking effect.” In reality, this bailout, like the many others that preceded it, will likely add billions to the burgeoning national debt.
Second, the $10 billion to “save teachers’ jobs” appears curiously similar to a bailout for the national teachers unions. As Heritage Foundation education policy analyst Lindsey Burke recently noted,
School districts are rehiring teachers without a federal bailout, but the administration and certain members of Congress claim catastrophic layoffs will occur if Washington doesn’t do something. Teachers’ unions are huge contributors to campaigns, and likely have about $24 million in dues at stake in the debate.
Third, while aid to needy seniors is almost always a political winner, the reality of Medicaid funding isn’t nearly as clear cut. State Medicaid programs already received an $87 billion bailout as part of the 2009 stimulus bill, and every state knew then that this funding would expire at the end of 2010. While some states chose the more difficult path of living within their means, others have not. Simply put, extending aid at this point has the effect of rewarding fiscally reckless state budget policies.
This legislation should be called out for what it is: a massive federal bailout for influential teachers unions and irresponsible state governments. With recent polling revealing that only 28 percent of voters believe increased government spending is good for the economy and poll after poll after poll consistently confirming that the economy and jobs are the top priority for the electorate, it has become clear that Congress is simply ignoring the will of the American people. At some point, these massive federal bailouts must end.