On April 8, The Pilot published my column about the “pork” included in the $2.2 trillion “Take Responsibility for Workers and Families Act.” In that article I pointed out over $100 billion of goodies that are unrelated to COVID-19 relief.
Little did we know that House Speaker Nancy Pelosi was just getting started with her wish list.
The $3 trillion HEROES Act — Health and Economic Recovery Omnibus Emergency Solutions Act — passed the House on May 15. Passage of this bill was likely the most egregious application of power politics in our history.
While the Senate reconvened May 1 after the spring break, Pelosi left the representatives home while she put together the bill. Upon completion, she reconvened the House for an immediate up-or-down vote.
Did they read the bill before voting? That’s unlikely, since it is 1,800 pages long.
What did not happen before the vote was the meeting of a single House committee to take into account expert witnesses’ views. Not a single amendment or input from Republicans was allowed. The bill passed along partisan lines.
The bill directs nearly $1 trillion to state and local governments, including $500 billion for state governments and an additional $357 billion for local governments and counties, mostly in the form of unrestricted aid that doesn’t need to be used to offset coronavirus costs.
One trillion dollars is difficult to comprehend. If you were to spend one dollar per second, it would take you over 32,000 years to spend it all.
On May 18, The Wall Street Journal editorial board provided some insightful thoughts on fiscal responsibility by comparing the states of New York and Florida. The leading lobbyist for Pelosi’s plan is New York’s Gov. Andrew Cuomo. His antagonist is Florida Sen. and former Gov. Rick Scott.
Both were first elected governor in 2010. The comparison of their economic planning and fiscal management during the 2010-2019 time-frame tells an enlightening story. In 2010 New York’s population was 19.4 million, while Florida’s was 18.8. While Florida’s population grew 2.7 million over the ensuing 10 years, New York’s increased by only 75,000.
New York has increased spending by $43 billion since 2010, about $570,000 for each additional person. The Florida budget has increased by $28 billion, a $10,400 increase per new resident.
While New York has a top state and local tax rate of 12.7 percent, Florida has no state income tax. New York has a growing budget deficit. Scott inherited a large deficit in 2010 but paid down state debt and built a surplus.
The difference is spending. For example, New York spending on worker retirement benefits has nearly doubled since 2010 and is six times greater than Florida. The cost to service the New York debt has doubled.
New York state and local government debt in 2010 was $317 billion. By 2019 the total has grown to $374 billion and is expected to be $433 billion by 2023.
New York’s biggest cost driver is Medicaid, which is 40 percent of the state budget and twice what it spends on education. By comparison, Florida spends equal amounts on schools and Medicaid.
New York spends about $76 billion a year on Medicaid, three times more than Florida. New York spends about twice as much per Medicaid beneficiary and six times more on nursing homes as Florida, though its elderly population is 20 percent smaller.
New York spending on Medicaid has squeezed spending on transportation, causing trains and roads to fall into disrepair. Conversely Florida has increased transportation spending 10 times more than New York between 2010 and 2019.
Many high-earning individuals are leaving the high taxes of New York. It lost $9.6 billion in adjusted gross income to other states in 2018 while Florida gained $16 billion. The rate of private job growth in Florida has been about 60 percent higher than in New York from 2010 to 2020. Finance jobs expanded by 25 percent in the Sunshine State compared to 9.7 percent in New York.
The awful truth is we may never be able to pay down this new $1 trillion in federal debt, but every year taxpayers have to service the national debt. The policy question here is why taxpayers in Florida and other well-managed states should pay higher taxes to rescue a New York political class that refuses to restrain its tax-and-spend governance.
You, the taxpayer, have a choice here. You can believe how Speaker Pelosi described the bill to the House membership just before they voted, saying, “This is a very strategically planned piece of legislation that is tailored strictly to meet the needs of the American people regarding the coronavirus pandemic. To do anything less would not be responsible.”
Or you can remind yourself it is never a good idea to take Speaker Pelosi at her word. “...strictly to meet the needs” of the American people? Really?
Lt. Gen. Marvin L. Covault, U.S. Army (ret.) is the author of “Vision to Execution,” a book for leaders.