Category Archives: Politics

Welcome to America, kids – eventually

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

The question of what to do with these 50,000 Central American children sent to America alone by their parents to escape violence and poverty in their homelands – that’s a tough one. What do we do? Let some of them stay? Send them all home?

Eventually, we’ll be asking young immigrants to come.

We will do that because the decisions we have made, politically and personally, will leave us with no better choice. Let’s look at some statistics to see why.

In 1946, the World War II generation returned home from overseas and made a bunch of babies. From that year until 1964, 80 million baby boomers were born, and now they are beginning to retire in massive numbers and living longer than previous generations. Social Security’s framers did not plan for this influx of long-living beneficiaries when it was created. Life expectancy was 64 for a program that started paying benefits at age 65. There was one beneficiary for every 16 workers paying into the system.

Now there are three workers supporting each beneficiary. By 2025, the ratio will be 2.3 to one. The baby boomers themselves did not make enough babies, and then Congress messed it all up by raiding Social Security to pay for other programs.

This isn’t just a problem for the Social Security system. Entire sectors of the economy will be looking for workers. For example, the trucking industry, which pays pretty well, is expecting a deficit of 300,000 drivers over the next decade.

Could we just wait for people to make more babies who will grow up and fill the void? Not really. According to the Census Bureau, the median age for American females in 2013 was 39. That means a lot of us are too old to make babies. We’d have a real problem if it weren’t for the Hispanics already here (average age: 27).

Let’s review. We’ve promised benefits to an entire generation of retiring senior citizens, but we don’t have enough young people working to pay for those benefits, fill jobs in certain sectors, or make babies themselves.

We need an influx of young people – fast. Where could we find them? Obviously, south of the border and across the ocean.

At some point, regardless of all the political yelling, the United States will loosen its immigration laws. Those already here will be given a path to citizenship, or at least a path to something. The door into America will open wider. It might be attached to a wall, but the door will be open.

Is this the right thing to do? It won’t matter, because no one will have a better idea.

We ultimately will do this because we will have no better alternative as a result of the choices we have already made. Politically, we could have raised the retirement age enough to compensate for our increased lifespans. We have chosen not to do that. Our society could have fostered the expectation that the care of the elderly would be primarily the responsibility of their children. We decided, for many good reasons, to also rely quite a bit on Social Security, Medicare and Medicaid. We could have had a sensible immigration policy. We chose to squabble about it. As individuals, we could have had more kids. We, including my wife and I, decided that two were enough.

The choices we have made over the past 50 years, when we have had lots of alternatives, will dictate the choices we will make in the future, when we will have far fewer alternatives. So welcome to America, kids – if not now, then eventually.

Must the governor be a Farm Bureau member?

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

Do you know how to join Farm Bureau, and if you didn’t, would that mean you couldn’t be governor?

I’m asking because, during a joint appearance Tuesday at a Farm Bureau meeting, Asa Hutchinson and Mike Ross were asked if they were members. It was not Hutchinson’s best campaign moment.

“I didn’t pay any money,” he said. He then added somewhat awkwardly, “I don’t know whether I’m a member of the Farm Bureau. I haven’t – I’ve been in Congress. I worked with the Farm Bureau. I’ve been to your meetings and gatherings. I’m not sure what it takes to be an official member.”

Ross pounced when it was his turn to speak. “I am a member of Arkansas Farm Bureau. I pay my – what is it – $35 annual fee? And I always get that free dinner at the Prescott-Nevada County Fairgrounds.”

The audience applauded. Ross clearly won the exchange. His campaign issued a news release saying this was an example of Hutchinson being disconnected and out of touch with Arkansans, which is the narrative the campaign is trying to push. The Hutchinson campaign, meanwhile, is trying to paint Ross as an Obamacare-enabling Democrat.

Beware of trusting campaigns’ narratives about their opponents.

In real life, of course, the fact that Hutchinson doesn’t have a membership in Farm Bureau means only that he never had a reason to purchase one. Really, do these guys have to pay a fee to every organization in Arkansas?

What matters – to farmers, to those who work in agriculture and food processing, to Farm Bureau – is the candidates’ records, their priorities, and their competence.

I asked both campaigns to name their top priority in agriculture. Hutchinson’s campaign sent a statement saying his priorities are expanding the marketplace for Arkansas farm products, including increasing access to world markets, and supporting research funding for Arkansas agriculture. He said his secretary of agriculture must understand row crop farming. Ross’ campaign said he would strengthen the state Agriculture Department’s Arkansas Grown initiative, which connects Arkansas producers with buyers. He said increasing export opportunities “no matter how large or small the producer” would be a top priority.

Sounds like they both would do all right.

Hutchinson’s Farm Bureau flap was forgettable enough that I’m conflicted about writing about it. But there is a larger picture, and it’s the tendency for too much to be made of inconsequential moments in campaigns – you know, gaffes. Remember Texas Gov. Rick Perry saying “Oops” when he couldn’t remember one of the federal agencies he would abolish during a debate in 2012? He got killed for that, even though most everyone’s mind goes blank occasionally, and when it does, they might say “Oops.” In a 1988 debate, Democratic presidential candidate Michael Dukakis was asked by CNN’s Bernard Shaw whether he would support the death penalty if his wife were raped and murdered. He answered the question calmly and rationally, and afterwards he was raked over the coals because of it. His poll numbers dropped the day after the debate, which the pundits blamed on his lack of emotion in answering a hypothetical question.

Gaffes do the most damage when they play into a developing impression. Questions were already arising about Perry’s unpreparedness and Dukakis’ cool detachment. Hutchinson stubbed his toe, but had the Ross campaign already succeeded in painting him as out of touch, the Farm Bureau exchange might have been a bigger deal. You can bet Ross will not make the mistake of saying anything positive about Obamacare.

For the record, I am a member of Farm Bureau because it’s how I insure my cars and home. I do not own a farm. And yes, the annual membership fee is $35.

Now what’s this Ross was saying about a free dinner?

What the third party candidates said

By Steve Brawner
© 2014 by Steve Brawner Communications

It’s still a tossup as to who will be the next governor, but we know who it won’t be: neither Frank Gilbert nor Josh Drake, the Libertarian and Green Party nominees.

Gilbert, the Libertarian, and Drake also know neither of them will be the next governor – not in a system dominated by Republicans and Democrats. Nevertheless, they’ve put their names on the ballot.

Here’s the shorthand for what their parties stand for. Greens are pro-environment and pro-government health care. Libertarians are for less government in both economic and social issues.

Drake and Gilbert presented their cases during an Arkansas Press Association debate July 11 – and, by the way, kudos to the APA for giving them that opportunity. Here’s what they said …

About same sex marriage. Drake, the Green Party candidate, said the Constitution guarantees equal protection under the law, regardless of what the majority says. Gilbert said government should stay out of the marriage-defining business, adding that he was offended that his wedding preacher said he performed the ceremony by the authority vested in him by the state of Tennessee. The government had nothing to do with his marriage, he said.

About the “private option,” the state program that uses Obamacare dollars to buy private insurance for lower-income Arkansans. Gilbert, the Libertarian, opposes it “unequivocally” and criticized the legislative Republicans who made it possible. Arkansas should not be involved in a coalition with the debt-ridden federal government to make possible this “terrible idea tacked onto a disgusting idea,” he said. Drake said other civilized countries offer universal health care, and so should the United States. Absent that, he said it’s “absolutely lunacy” to consider turning down those federal dollars when many Arkansas hospitals are struggling.

About Arkansas’ bursting-at-the-seams prisons and jails. Gilbert said too many people are being arrested and incarcerated and said his first step as governor would be to “pardon every nonviolent drug offender in the state of Arkansas.” Drake said the war on drugs has been lost and that it’s time to consider if some people in prison really ought to be there.

About C&H Hog Farms, the industrial-sized farm that has prompted concerns about potential contamination of the nearby Buffalo River. Drake, the Green Party candidate, said such an operation should not be located near a watershed and that the state must protect its water supply and its tourist attractions. Gilbert said he didn’t trust bureaucrats to protect the environment and that water use disputes should be handled through the court system.

About the lottery being under closer control of the governor. Drake expressed doubts about giving the governor too much power and said he’s “not a big fan of the lottery” or of gambling in general. Gilbert said the lottery should be managed by private individuals rather than bureaucrats. Given the opportunity, he would end the lottery.

About taxes. Gilbert would eliminate personal and corporate income taxes as quickly as possible. Doing away with the costs of corporate welfare would make it easier, he said. Drake said taxes on the wealthy should be increased so the sales tax on food can be ended and other sales taxes lowered.

In his closing argument, Drake said third party candidates should be included in more debates and given more attention by the media. Having more political parties would be good for the press, he said, because contested races create more intellectually stimulating campaigns, which attract readers and viewers. He didn’t say it, but viable third party and independent candidates, given a chance to compete, might attract enough support that they could buy ads, too.

Gilbert cracked up the audience in his closing remarks by saying, “I encourage you to look around yourself and see if you think there’s a whole lot that the Libertarians can make worse, and that there might not be a thing or two that the Libertarians could make better. Pick up your dice, throw them, and if it comes up snake eyes, vote Libertarian.”

By the way, also participating in the APA debate were the two major party candidates – Asa what’s-his-name and Mike somebody.

How to fund highways? Not this way.

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

How long could your family pay for today’s needs with tomorrow’s dollars before it would start to catch up to you? Congress is doing something like that, again.

The Highway and Transportation Funding Act of 2014 would provide extra highway funding for 10 months by pulling money from future revenues through a tactic known as “pension smoothing.” This allows employers to delay contributing to their employees’ pension plans, thus raising the employers’ taxable incomes now. Under a formula, they’ll make up the difference later, reducing their taxable incomes then, and at that point a future Congress will have to budget for that lost revenue. But that’s a problem for the future Congress.

The House of Representatives passed the $10.8 billion bill this past week, with all four Arkansas House members voting yes – which I guess they had to do, because the alternative was a train wreck. The Senate is expected to vote on the matter as early as this coming week.

This is happening because we’ve reached yet another unnecessary fiscal crisis. The Highway Trust Fund, which reimburses states for highway costs, will be dry within a couple of weeks – the result of too few dollars funding too many projects. The Arkansas Highway and Transportation Department (AHTD) has already delayed some contracts in case that happens.

Money flows into the fund as a result of federal highway laws passed periodically by Congress. In the past, these have been five- or six-year deals so states could make long-term planning decisions. It takes, after all, a long time to build a highway. The most recent, MAP-21, lasted only two years, and now it’s expiring. The Highway and Transportation Funding Act would extend MAP-21 only to May.

Highways are funded mostly through fuel taxes. These are easy to collect, they don’t require that much bureaucracy, and they are considered to be fair because they are user fees. The person using the government service, the highway, is the one who pays for it.

But the federal fuel tax has not been increased since 1993, which means inflation has eaten away at it. Meanwhile, cars have become more fuel efficient, so we’re buying fewer gallons to drive the same distance, thereby paying even less in fuel taxes. At the same time, construction costs have risen.

There’s waste in the highway system, of course, but even if all of that were eliminated, the country still would be investing far too little in its aging and decaying infrastructure. According to the American Society of Civil Engineers, the average bridge in America is 42 years old.

For now, the easiest, quickest, most efficient way of increasing highway funding is raising the gas tax, but politically that’s a tough sell. Even the Connecting Arkansas Program passed by voters in 2012 exempted fuel as part of its half-cent sales tax. Meanwhile, the fuel tax faces an uncertain future. As Scott Bennett, AHTD director, points out, reducing fuel consumption is a national priority, so how can consumption continue to be the primary way we fund highways? The Obama administration is suggesting letting states put toll booths on interstates – an inefficient way of collecting money that is inconvenient for drivers. Oregon is testing a vehicle miles traveled tax, where drivers’ mileage would be tracked, and they would be taxed accordingly.

It may be that the only solution now is for states to bear greater responsibility for maintaining and constructing the nation’s roadways. According to Bennett, 70 percent of Arkansas highway construction funding comes from the federal government, but other states pay more of their own way.

Arkansas voters have shown a willingness to pay for highways. In addition to the Connecting Arkansas Program, they also voted in 2011 for the Interstate Rehabilitation Program, which funds interstate improvements through a bond issue. Those two programs are funding $3 billion worth of work. On the other hand, they only apply to 4 percent of the state’s highway miles.

What do you think? Raise fuel taxes? Build toll booths? Track how far (and maybe where) we drive? Let the states take care of it?

Something has to happen. There are only so many times future dollars can pay for current work.

One-sided approaches won’t stabilize the debt

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

Is it possible to bring the government’s debt under control by focusing only on one area – raising taxes, for example, or cutting defense spending? Let’s return to the Debt Stabilizer to find out.

I wrote last week about the Debt Stabilizer, an online tool created by the Committee for a Responsible Federal Budget that lets average citizens make tax and spending choices – hopefully better ones than Congress has made – in order to reduce the public debt.

Currently $12.6 trillion, the public debt is the portion of the $17.6 trillion national debt that doesn’t include what the government has borrowed from itself, such as from Social Security. It’s currently 78 percent of the size of the economy and headed to nearly 150 percent by 2050. Historically, it’s been 40 percent.

The goal of the Debt Stabilizer exercise is to reduce the public debt to 60 percent of the economy by 2024. Doing so requires improving the government’s balance sheet by $4.84 trillion over 10 years – equal to $1.54 million for every American.

I managed to reduce the public debt to 59 percent of the economy, mostly by cutting spending while raising the gas tax and closing tax deductions, and then wrote about it in my last column. After I emailed the link to the CRFB, communications director Jack Deutsch replied with an observation: Try playing various roles – the defense cutter, the tax raiser, etc. You’ll see how one-sided approaches don’t work well.

Let’s see if he’s right.

I started by trying sort of a House Republican approach: Oppose most defense cuts, support most spending cuts, and support most tax cuts. That approach left me at 69 percent of gross domestic product by 2024 and at 60 percent by 2028. However, some of those spending cuts, including the steeper ones for Social Security and Medicare, are unlikely to materialize.

I next was more of a congressional Democrat – cut defense, increase social spending, tax the rich, etc. That option reduced the debt to 73 percent of the economy but did not put the country on a path to 60 percent. “Uh oh! You failed to reduce the debt to a sustainable level,” the Debt Stabilizer said.

Other imbalanced approaches were unsuccessful. I tried one that would be popular with many Americans – cut taxes and spending without touching Social Security and Medicare. That got me to 73 percent, same as the congressional Democrats. The same percentage was reached when I cut defense spending and pulled us out of Afghanistan but left everything else alone. Doing almost nothing but cutting foreign aid left the debt at 78 percent of the economy. Foreign aid is 1 percent of the budget.

There were several imbalanced approaches that reached 60 percent. Raising every tax on the list and ending every deduction reduced the debt to 57 percent of gross domestic product. Cutting spending wherever I could and leaving taxes alone reduced the debt to 56 percent. Cutting all the taxes and all the spending reduced the debt to 60 percent.

However, those spending cuts included politically unpopular reductions for Medicare, Social Security – even $30 billion less for school breakfasts. Realistically, they wouldn’t happen. My tax increases included similarly unlikely scenarios such as ending deductions for the powerful oil industry and reducing the amount that average Americans can deduct for charitable gifts.

When I started this exercise, I hoped to play the parts of Rep. Tom Cotton and Sen. Mark Pryor, but I soon decided I couldn’t do their positions justice – particularly Pryor, who can be hard to pin down. Safe to say that Cotton takes pretty much the congressional Republican approach, which requires a number of unlikely spending cuts. Pryor – at least based on how he’s campaigning – is somewhere in the neighborhood of congressional Democrats, who, as the Debt Stabilizer makes clear, “fail to reduce the debt to a sustainable level.”

If a family’s debt needed stabilizing or a small business were in trouble, everyone would gather around the table to consider what to cut and where extra income could be found. Probably no one would get everything they wanted, and if one tried to dictate, the rest would not buy in.

At some point, Americans and their elected officials hopefully will realize that the government is no different – that choices and compromises must be made. If that happens, the debt will be reduced to a sustainable level.

And if that never happens? Uh oh.