Posts Tagged united states

A New Shade of Blue


Residents of Penn’s Woods are about to experience history in the making: the start of a new state budget year with the previous year’s budget still unresolved.

Governor Tom Wolf guaranteed the anomaly by line item vetoing almost a third of the budget passed by the GOP-controlled legislature just before Christmas.

The official start of the budget process comes in early February when the governor delivers his budget address to a joint session of the Pennsylvania General Assembly.  For a variety of reasons the remaining unresolved budget issues from the current fiscal year are likely to remain that way well past the governor’s budget speech currently scheduled for February 9th.

Governor Wolf began the current impasse last winter by proposing a massive increase in state spending and demanding a package of tax hikes that exceeded the tax increases proposed by the governors of all 49 other states combined.  The governor asked this of a legislature not only in control of the opposite political party, but one that holds historically high majorities and one which has become significantly more conservative in recent years.

It is a common strategy for both sides to stake out their most extreme position at the beginning of negotiations.  That leaves room for compromise, which is what always happens during budget talks.  Governor Wolf asked for $3.4 billion in new spending, the GOP preferred spending cuts.  Ultimately, Republicans agreed to a $1 billion increase, including significant additional funding for the governor’s top spending priority: public education.  The governor, however, wants everything he asked for and he wants in now.  Thus began the budget impasse which persists to this day.

The governor has made it clear he is not interested in compromise.  After vetoing the on-time, no tax hike, balanced state budget passed by Republicans last June he immediately sanctioned television ads blasting GOP lawmakers.  In another departure from tradition Wolf vetoed the entire budget.  In the past governors have signed the budget then blue lined or line item vetoed the parts with which they disagreed.  Wolf, however, wanted to ratchet up the political pressure on Republicans so he trashed the entire thing.

Since then there have been numerous votes on alternative budgets, proposed tax hikes, and so-called cost drivers including pension reform and a plan to partially privatize state liquor stores.  GOP lawmakers have passed these bills only to have the governor wield his veto pen.

Governor Wolf and his allies in the liberal media have taken to castigating Republicans, especially House Republicans for being “extremists” because they will not support a broad-based tax hike.  Largely unreported by the media is the fact Democrats in the legislature have been equally obstinate in their support of the governor’s tax and spend agenda.  Vote after vote has fallen along party lines with only a handful of defections on either side of the aisle.

This (aside from the governor’s stubborn streak) gets to the core of the impasse: Democrats have been reduced to a largely urban party that allows no deviation from its Left-wing agenda.  Conservatives dominate in the Republican caucus, but there is a group of moderate, mostly southeastern Pennsylvania legislators, who often fracture party unity by siding with Democrats.

And look for Democrats to become more ideologically rigid after this year’s elections.  State Representative Nick Kotik of Allegheny County is one of only a very few so-called blue dog Democrats and he is retiring.  The term blue dog originated because the Left strangles their moderate brethren blue to force compliance.  This canine is about to become extinct in the Pennsylvania legislature.

In its place is another shade of blue: that being the governor’s face.  He is determined to hold his breath until he gets his way.  He has called Republicans stupid, extreme and their most recent budget “garbage.”  By remaining in campaign mode rather than maturing into governing the governor’s strategy ensures not only that the current budget impasse will continue, but that Pennsylvanians are in for three more years of fiscal chaos.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

Permission to reprint is granted provided author and affiliation are cited.

 

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Rules for Conservatives


If the Left had a religion (which of course they don’t), their Bible would be a book by tactical guru Saul Alinsky entitled Rules for Radicals.  The original “community organizer,” Alinsky’s seminal work has been the “how to” guide for the extreme Left for several generations.

Using Alinsky’s rules, liberals (now re-branded progressives) have generally out-maneuvered conservatives on the ideological battlefield.  After an extended period of time conservatives have somewhat caught onto the Left’s tactics, but still it would be helpful for the Right to have its own set of rules.  This is difficult because unlike the Left, which moves in politically correct lockstep, conservatives actually think for themselves making unity more difficult.  But, herewith I am willing to offer some suggested Rules for Conservatives:

Rule # 7:  Talk about why we can win, not why we can’t.  As the current presidential campaign has unfolded conservatives have fallen into the mainstream media trap of talking about why their candidates cannot win. Trump can’t win because he has a big mouth.  Rubio can’t win because he isn’t sufficiently conservative.  Cruz can’t win because he is too conservative.  Rather than focus on why each potential candidate can’t win, talk about why he or she can win.

Rule # 6: Obey the ‘Buckley Rule’.  William F. Buckley, one of the founding fathers of modern day conservatism back in 1964 observed that we should support “the rightward most viable candidate.”  Conservatives love to stand on principle, and while we should never abandon our core beliefs, we must also take elect-ability into account when deciding which candidate to support.

Rule # 5: Don’t fight over minor policy differences. Especially in crowded primary fights candidates and their supporters tend to fixate on even the tiniest differences in policy positions.  This causes voters’ eyes to glaze over and worse obstructs their view of the big picture.  Yes, at some point those minor differences will become important.  But not until you actually win the election and are in a position of power.

Rule # 4: Accept partial victories.  We all have a policy end game.  But the political process generally unfolds in small steps not in big, bold moves. The Left understands this and is willing to accept a small victory then come back and fight for more.  Conservatives demand all or nothing, and all too often end up with nothing.  Remember, change is a marathon, not a sprint.

Rule # 3: Don’t hold grudges.  The old saying “friends are temporary, but enemies are forever” often applies to conservatives.  Your competitor in this election cycle or on one policy fight just might be your ally in the next.  Be willing to forgive because there aren’t enough of us to be divided by past grievances.

Rule # 2: Be a happy warrior.  Even when almost felled by a would-be assassin’s bullet Ronald Reagan joked with doctors on his way into the operating room.  We are not the dour old Left that sits around worried about the world vaporizing because of climate change.  We live in the greatest nation known to man with freedoms granted to us by our Creator.  This is a cause for celebration and joy. Act accordingly.

Rule # 1: Never give up.  Yes, some of our candidates will lose and the Left will win more than their share of policy battles.  But there is always another election and there will inevitably be a new policy battle.  Ronald Reagan lost a string of early primaries in 1980 and was given up for politically dead.  But he pushed through the defeats, eventually winning enough delegates to claim the nomination and ultimately the presidency.  Ronald Reagan never gave up, and neither should we.

I’m sure you could probably add a few more rules of you own to this list, but as a new and pivotal year in American history is about to unfold we need to keep our goals in mind, focus on what is most important, and fight hard for freedom.  After all, this gift called America is now in our possession and it is our duty to preserve, protect and defend what Abraham Lincoln called “the last best hope” of man on Earth.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org. )

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Is a Liberal Arts Education Obsolete?


Beset by rising costs, massive debt, excessive political correctness and questions over its relevance, the tradition of a four-year liberal arts education is under assault.

As well it should.

The concept of a liberal arts education extends back to the ancient Greeks and is governed by the theory that students should be exposed to a wide range of disciplines with the emphasis on building critical thinking skills that will have broad application.

That paradigm has worked for generations.  But higher education today has perverted the quest for knowledge into factories of indoctrination and profit while failing to equip graduates for practical employment and even life in the real world.  As a result, the time has come to question whether we are receiving an acceptable return for our massive and ever-increasing investment in the education industry.

Intellectual elites will cringe at the use of the word “industry.”  A few years back I was amazed at how disconnected from reality some educators have become when one professor wrote a letter to my local newspaper arguing that higher education cannot be viewed through the prism of economics, but rather knowledge was valuable just for the sake of knowledge.

Certainly there are those in society who can afford to study and earn a degree purely for personal enrichment.  The reality is a four-year or graduate degree is but a tool to finding family-sustaining employment.  For most individuals, in fact for our economy as a whole, higher education is a useless ornament unless it leads to practical application; in other words a good job.

On this front our colleges and universities are failing us.  On the cost side of the ledger our institutions of higher learning compete for students by adding costly amenities that have turned many campuses into four star resorts.  Students pay for this in the form of higher tuition, and fees which today rival tuition in cost.  As a result students incur massive loan debt that makes it difficult, sometimes impossible, to establish a family and purchase a home.

After investing four – or today more likely five – years of their lives in a costly education increasing numbers of graduates are having difficulty finding work in their field.  That is because higher education is stuck in an early 20th century model that simply does not adequately prepare students for today’s employment opportunities.

U.S. Senator Marco Rubio, a candidate for the Republican presidential nomination, succinctly pointed out that we have more need today for welders than for philosophers.  There is, of course, limited demand for philosophers.  In the meantime, industry cannot find enough qualified applicants to fill high paying manufacturing jobs.  According to a national study five percent of skilled production and production support jobs currently are unfilled “simply because they can’t find people with the right skills.  Translated into raw numbers, this means that as many as 600,000 jobs are going unfilled.

And here is the kicker: A survey of manufacturers finds respondents reporting “that the national education curriculum is not producing workers with the basic skills they need – a trend that is not likely to improve in the near term.”  As a result, despite stubbornly high unemployment and underemployment, manufacturers will continue to export jobs to other countries simply because our system of higher education is failing to equip students for the jobs available in the 21st century economy.

Worse, the spectacle of student protests in recent weeks has undermined the foundational argument that a liberal arts education teaches students to think.  It has become abundantly clear that our colleges and universities place the inculcation of Left-wing political correctness above critical thinking skills.  So much so that students are demanding so-called “safe zones” so they don’t even have to hear words with which they disagree.

As taxpayers watch increasing amounts of state budgets going to higher education, and students incur massive debts only to graduate without the skills employers need, the time has come to question whether it is worth the investment.  Basically, a liberal arts education today has become an eight-track player in the digital age.  If our nation is to continue to be competitive in today’s global economy the time has come to rethink and redesign how we educate and prepare our young adults for productive employment.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

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The Charlie Dent Effect


Establishment Republicans are in a panic over the enduring popularity of Donald Trump.  If Trump ends up being the GOP nominee party regulars can blame one of their own: Congressman Charlie Dent.

Congressman Dent (PA-15) has emerged as a spokesman for one of the most endangered species on Earth: moderate members of the U.S. House of Representatives.  His votes consistently defy the view of the party’s base and his rhetoric is what is driving the current national grassroots revolution against the party establishment.

Dent hails from the Lehigh Valley-based district once represented by Pat Toomey.  Toomey became a conservative darling and used the district as a base to successfully launch a campaign for United State Senator.  The region is known for being politically schizophrenic and is one of the true “swing” areas of the commonwealth in statewide and national elections.

The apostasies of Dent are many.  He is staunchly pro-abortion in a party that views defense of life as a litmus test issue.  On fiscal issues he ranks in the bottom quarter of the entire Republican conference with a 2014 Club for Growth scorecard rating of just 37%.  On the more broad-based American Conservative Union (ACU) scorecard, he scored just 54%, again making him one of the more liberal members of the conference.

Briefly put, Charlie Dent is the personification of what Republican voters across the nation are rebelling against in the presidential race.  Having elected a House majority in 2010 and a Senate majority in 2014 voters are fed up with the tepid course charted by legislative Republicans.  They see congressional Republican leadership as ineffective at communicating a coherent party message and outmaneuvered legislatively at every turn by Barack Obama and the Democrats.

The most recent Real Clear Politics average of national polling in the presidential race finds Donald Trump and Ben Carson holding onto 47% of the vote.  Add in the ten percent supporting Carly Fiorina and the “outsider” vote tallies 57%.   U. S. Senator Ted Cruz, technically not an “outsider,” but perhaps the most solidly conservative candidate in the race pulls 8%.  Meanwhile, establishment favorites Jeb Bush and Chris Christie have fallen into also-ran status.

The resignation of House Speaker John Boehner has given members of that chamber the opportunity to change the dynamic of both feckless legislative leadership and the presidential race by electing a speaker who can become an effective voice for the party over the next year until the election of a new Republican president.

Instead the House Republican caucus has descended into chaos.  Rather than put forth bold new leadership, Plan A was simply to fall back on business as usual and move everyone up a step on the leadership ladder.  When it became clear the real conservatives in the conference would not go along, heir apparent Kevin McCarthy withdrew from the race.  Plan B is to elevate 2012 Vice Presidential nominee Paul Ryan to the seat, but Ryan appears unwilling to go along with the procedural reforms conservatives are rightfully demanding as the price for their support.

Enter Congressman Dent who suggested Republicans should meet with Democrats and come up with a “bipartisan coalition to elect the next speaker.”  What?!?   At precisely the time the party’s grassroots are practically shouting from the rooftops of Iowa and New Hampshire that they want a strong new voice for the party Dent proposes the exact opposite.

Dent and his diminishing band of fellow moderates would rather share power with Democrats than accommodate conservative members of their own conference and hear the very clear message being sent by the party’s grassroots.  Nothing could be worse for the GOP than the spectacle of the next speaker being elected by the moderate faction of the Republican conference joining with Democrats against their conservative brethren.

The result of such an outcome would be twofold:  First, any possibility of the GOP being an effective counter to President Obama’s “pen and phone” government would evaporate effectively rendering congress a useless appendage for the next year.  Second, look for Donald Trump’s polling numbers to skyrocket as voters flock in ever larger numbers to the one man who they increasingly view as being able to fix things.

And, when Donald Trump stands in front of the Capitol building and places his hand on the Bible to take the oath of office as the next president of the United States, he should give a front row seat to Charlie Dent and the other Republican congressmen who made his victory possible.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

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Thomas J. Smith: An American Life


From the minutemen of the American Revolution to the settlers of the old West to the housewives who poured into the factories during World War II to the Tea party movement of recent years our nation began and thrives when ordinary Americans step up and do extraordinary things.

Since the beginning of our Republic the concept of a “citizen legislator” has been the ideal.  Our founding fathers realized that professional politicians are more concerned about their careers than “we the people” posed a threat to our liberty.  Four score and seven years later, President Abraham Lincoln eloquently called it a government “of the people, by the people and for the people.”

Now special interests and professional politicians dominate both Washington, D.C. and Harrisburg while the interests of working families, small businesses and senior citizens take a back seat.  But there are those who are willing to leave the comfort of their private lives and fight to preserve, protect and defend the God-given rights upon which our nation was established.

Thomas J. Smith was one who has answered his nation’s call.

Tom Smith, who passed away on Saturday at the age of 67, was an American success story.  At the age of nineteen, when his father became ill, Tom decided to postpone college and run the family’s Armstrong County farm.  He mortgaged his existing property to purchase a coal mine and – by risking capital and his financial security – successfully expanded his business operations over a 20 year period eventually mining more than a million tons of coal per year and employing over 100 people.

Along the way, Tom and his wife Saundra had three biological children. Then, the Smith’s adopted a family of four children from Texas allowing the siblings to be raised together.

After selling his mining interests in 2010 and becoming alarmed over rapidly expanding federal intrusion into our lives, Tom was in the vanguard of the Tea party movement and helped to found the Indiana/Armstrong County Patriots.

But that level of activism was not enough for Tom Smith.  In 2012 he decided to run for the Republican nomination for a U.S. Senate seat from Pennsylvania.  The sitting governor and state GOP endorsed another candidate, but Tom persevered dealing the party a rare defeat and besting five other candidates to win the nomination.  Despite his best efforts, the headwinds against the GOP in Pennsylvania that November resulted in the re-election of the incumbent.

This is the point where most people give up.  But not Tom Smith.  He was only getting started.  Tom became involved in a wide range of state and national policy battles serving on the boards and financially contributing to a wide range of organizations fighting for individual liberty and personal freedom.

In the summer of 2015 Tom was again planning to enter the political fray as a candidate for congress when he was diagnosed with a rare form of cancer.  That cut short his political career, but Tom remained involved fighting for the issues about which he cared deeply until his final days.

Ronald Reagan once said that “Freedom is never more than one generation away from extinction. We didn’t pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same, or one day we will spend our sunset years telling our children and our children’s children what it was once like in the United States where men were free.”

Thomas J. Smith did his part to ensure that freedom endures for the next generation.  His life and career will continue to serve as both an example of what citizen activism should be and as an inspiration to the rest of us to step up and continue the cause which he has “thusfar so nobly advanced.”

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

Permission to reprint is granted provided author and affiliation are cited.

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Public Opinion Court: Unions Yes, Special Union Privileges No


A recent Public Opinion Court focus group session empaneled by the Lincoln Institute of Public Opinion Research, Inc. on Worker Freedom and Economic Progress found a generally favorable opinion of labor unions, but a lack of support for the special privileges that unions currently enjoy within the Pennsylvania political and policy structures.

The Public Opinion Court is a research vehicle developed by the Lincoln Institute to allow for more in-depth probing of an issue area than can be accomplished by a public opinion poll.  Members of the focus group are not told in advance what issue they will be discussing.  Thus they come into the session with common knowledge of the issue.  The process begins by having the focus group take an entry survey.  Following the entry survey an advocate addresses each side of the issue.  The advocates speak separately, with focus group members given time to ask questions.  After each advocate speaks, the group engages in a roundtable discussion on the issue.  The focus group then concludes with an exit survey designed to measure how opinions may have changed as the group went from common knowledge of the issue to being more informed.

For this Public Opinion Court session the issue advocates were Rick Smith, host ofThe Rick Smith Show, a labor union-backed public affairs radio program.  David Taylor, President of the Pennsylvania Manufacturers’ Association advocated for the pro-growth position.  Each speaker was given 20 minutes to make a presentation, followed by 10 minutes of Q & A with the focus group participants.

The Public Opinion Court focus group session was held on Monday, September 19, 2015 at the Reckner research facility in Chalfont, Bucks County.  The focus group participants were recruited from the five county Philadelphia metropolitan area. The focus group was balanced by age, gender, race, political party affiliation and, to the degree possible urban/suburban.  The goal was to make the group as closely representative of the state at-large, although it more accurately reflects the composition of the electorate in southeastern Pennsylvania.

A major theme that emerged from the group discussion was the lack of information voters in southeastern Pennsylvania receive about state government.  While all of the participants were able to correctly identify Mitch McConnell as the leader of the U.S. Senate and John Boehner as the Speaker of the U.S. House of Representatives, none could identify Joseph Scarnati as the President Pro Tempore of the Pennsylvania Senate or Mike Turzai as Speaker of the Pennsylvania House of Representatives.  The group agreed that media coverage of state issues in southeastern Pennsylvania is inadequate.

The group was more familiar with bigger picture labor power issues, such as Right to Work, but significantly less familiar with state-related union power issues like dues deduction and carve-outs for activities such as stalking, harassment and threats to use a weapon of mass destruction.  They were also largely unaware of the influence labor unions wield over politics and public policy in Pennsylvania.

Included in the focus group were two individuals who currently are members of a labor union and two participants who are retired, but were labor union members during their careers.  Of the two currently enrolled as a union member, one is a member by choice and the other a member as a condition of employment.

In both the entry and exit survey the participants held a generally positive view of labor unions.  Entering the session two had a very favorable impression of unions, seven a somewhat favorable view. Four offered a somewhat unfavorable opinion; nobody viewed unions very unfavorably.  There was only slight movement in the exit survey, so no major shift in opinion occurred as a result of the group discussion.  Entering the session, six participants agreed with the statement that labor unions were needed at one time to ensure workplace safety standards and fair wages, but are not generally needed in today’s society.  Seven disagreed with that statement.  In the exit survey one person switched from agreeing to disagreeing with the statement.

Although viewing labor unions favorably, there was strong support for a Right to Work law.  When asked if they favor or oppose enactment of what is commonly known as a Right to Work law, whereby a worker cannot be compelled to join or pay fees to a labor union as a condition of employment, in the entry survey four strongly favored such a law, eight somewhat favored a Right to Work law.  One person somewhat opposed such a law.  Nobody changed their opinion on the exit survey.  This result is significant given there were two active and two former union members in the focus group indicating opposition to a Right to Work law by union leaders does not trickle down through union membership.

Significant time was devoted to a discussion of exemptions in state law that allow stalking, harassment and threats to use weapons of mass destruction during a labor dispute.  The group was in disbelief that such carve-outs in state law even existed.  There was a lack of knowledge that labor union leaders have been blocking legislation in Harrisburg that would eliminate those carve-outs.  The group unanimously – in both the entry and the exit survey – indicated the carve-outs should be eliminated.

The group also unanimously agreed that there is never a circumstance in which acts of violence are justified to force a company to use union labor on a project.  The group was split, with six having heard of and seven not knowing about the recent case in Philadelphia involving the indictment and conviction of numerous Iron Worker union officials for crimes including violence, threats and vandalism.

Currently governments at all levels – state, county, school district and municipal – at taxpayer expense deduct labor union dues from members’ paychecks and forward the money to unions.  There is legislation being considered in Harrisburg that would end the practice and require labor unions to collect their dues money through private, rather than government means.  Nine members of the focus group oppose such forced deduction of labor union dues, four favor it.  Views did not change in the exit survey.

When a group of employees are voting on whether or not to form a labor union they currently do so by secret ballot.  Labor union leaders would like to change to law to make the voting process public.  Such a move raises concerns that the lack of anonymity would put pressure on employees to vote in favor of unionization.  The Public Opinion Court focus group unanimously agreed in both the entry and exit survey that such decisions should be made by secret ballot.

Raising the minimum wage, however, resulted in a split decision.  Nine entered the session favoring an increase in the state’s minimum wage, four opposed.   But, when asked if raising the minimum wage would result in fewer jobs and/or less hours being available for minimum wage workers, support for raising the minimum wage dropped to four participants with nine indicating opposition.

During the group discussion phase of the Public Opinion Court session several issues arose that were not included in the entry/exit survey process.  Several times the group returned to the state budget impasse.  While there was general knowledge about the stalemate, the group was largely unaware of such significant developments as the partial veto over-ride attempt, the second budget offer made by legislative Republicans or a then-pending vote for a stopgap budget.  The group also lacked comprehensive knowledge of the size and scope of Governor Tom Wolf’s proposed tax hikes.

The state’s public employee pension crisis also arose during group discussion.  There was general awareness of the problem and its significance to taxpayers.  The group was in unanimous agreement that those already retired and those currently employed should remain in the current defined benefits pension system and that the state should honor its pension obligations.   However, the group also unanimously agreed that the current system is unsustainable and that the state must move to a 401k-style defined contribution system.  Most were unaware of the passage of legislation last June to do just that and the fact Governor Wolf vetoed that legislation due to opposition by labor union leaders.

On each occasion when the group discussed government dysfunction, the participants fell back on one prescription for change: term limits.  Term limits were not mentioned in either the entry or exit survey, nor were they brought up by either speaker or the panel moderator.  Despite that, the group repeatedly and unanimously and with enthusiasm felt that career politicians were at the heart of the state (and national) government’s woes.  For example, when discussing the state’s pension crisis and the cost of legislative pensions to taxpayers, the group offered term limits as a solution which would make legislative pensions obsolete.

Conclusion

Efforts in Harrisburg to curtail special treatment for labor unions have failed repeatedly due largely to an alliance between Democrats and suburban Philadelphia Republican legislators who unite in opposition to such reforms as enactment of Right to Work legislation; ending union dues deduction and eliminating carve-out that allow for harassment, stalking and threats to use weapons of mass destruction during labor disputes.

That handful of suburban Republican senators and representatives who have stymied reform efforts claim they are representing the views of their constituents and must vote with organized labor in order to win re-election.   Results of this Public Opinion Court focus group session indicate that argument is not valid.  While labor unions are generally viewed favorably, on issue after issue the focus group supported reform measures, with even some current and former union members in agreement.  The political equation in Harrisburg has changed with the coming to power of enhanced Republican majorities in the current legislative session reducing the influence of union-backed GOP members.  However, Governor Tom Wolf – whose campaign was heavily financed by organized labor – now wields a veto pen over labor policy reforms.

Demographics

The Public Opinion Court focus group session on labor power issues was balanced by gender, seven males and six females.  There was at least one participant in each age group, with the largest participant group being between 50-65 years of age.  Income skewed high, as expected in the Philadelphia suburban region, but did include those in the middle income categories.  The group included seven Democrats, five Republicans and one Independent.  The focus group included four members with graduate degrees, six with a four-year degree, one with a post-secondary certificate, one with a high school degree, and one with secondary education.   Ten of the participants lived in a suburban area, two in an urban area and one in a rural area.

(The Lincoln Institute of Public Opinion Research, Inc. is a 501c3 nonprofit educational foundation based in Harrisburg, Pennsylvania that focuses on pro-growth economic issues.)

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Ending Corporate Welfare


Adoption of an annual budget is a core function of government.  Both the federal and state governments have failed to get the job done. At the national level there has been no budget for years, as congress passes “continuing resolutions” that keep the money flowing.  The budget impasse in Harrisburg is now in its third month, with Governor Tom Wolf rejecting the equivalent of a continuing resolution passed by legislative Republicans.

There are many reasons for this lack of agreement, but the bottom line is the age-old problem of too much demand for too few resources.  Eating up a large portion of both federal and state budgets is entitlement spending.  Taking away that which someone already receives is a near impossibility, yet neither budget crunch can be resolved until the spending side of the equation is addressed.

Republicans often point to social welfare as an area where spending can be cut, Democrats are adamantly opposed.  Corporate welfare is a different story. Here there is bi-partisan agreement.  Establishment Republicans love government hand-outs to big corporations. Despite lip service to the contrary, Democrats do too.

But, there is growing opposition among the GOP’s conservative base to continuing corporate welfare programs.  After all, how can you morally justify cutting social welfare when voting to give taxpayer dollars to wealthy corporations?  In order to address the systemic deficits present in both the federal and state budgets cuts in all such programs are needed.

At the federal level conservatives have been successful in closing down the Export-Import Bank.  This happened largely because the bank was up for reauthorization, meaning all congress had to do was nothing to put it out of business.  Congress is good at doing nothing, so the Export-Import Bank was allowed to expire.  But, supporters of the bank – which gives large, risky taxpayer-backed loans to big corporations – are working hard behind the scenes to resuscitate it, meaning the battle is far from over.

Here in Penn’s Woods the vehicle for corporate welfare is a little-known entity called the Redevelopment Assistance Capital Program (RACP).  Like most government programs it started small, with $400 million in borrowing authority in 1986.  By 2010, the last year for which complete information is available, borrowing authority had ballooned to $4 billion.

Unlike the Export-Import bank which merely finances risky loans, RACP is a grant program.  Meaning state government borrows money and then gives it to select businesses.  That is correct: state government borrows money, gives it away, and then repays the loans plus interest with tax dollars.  Worse, small businesses need not apply.  The grant program is only available for projects exceeding $1 million.

There is a set of criteria for a business to obtain a RACP grant, but since the final list of recipients must be approved by the legislature the politically well-connected have an advantage. There is no escaping the fact the entire effort amounts to little more than government picking winners and losers.

A new study by the Mercatus Center at George Mason University finds the program is itself a loser.  The study found: “The RACP is an inefficient and market-distorting program that mostly transfers economic activities from counties receiving less in RACP grants to counties receiving more of the grants.”  Another concern: the study found “RACP is likely to decrease economic growth in the long run since the market is ultimately skewed away from efficient investment and toward politically favored industries.”

The program is not even popular in the business community.  A recentKeystone Business Climate Survey conducted by the Lincoln Institute found 52% want the program eliminated entirely; another 40% think the amount spent on it should be reduced.  Over the years, the survey has consistently found business owners/CEOs would rather have across-the-board business tax cuts than such targeted grant programs.

Clearly programs like the Export-Import Bank and the RACP are nothing more than government welfare for politically connected companies.  The end result, at best, is government directing rather than expanding economic activity.  As budget-makers look for ways to bring government spending under control, reducing welfare – both corporate and social – must be part of the equation.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

Permission to reprint is granted provided author and affiliation are cited.

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