Morning Bell: The Government Bailouts Must End

Conn Carroll / June 14, 2010

Late Saturday night President Barack Obama sent a letter to the leadership of the House and Senate urging them to approve a tax and spending bill currently being debated in the Senate that already would add $80 billion to our nation’s budget deficit. But coming off of last year’s $862 billion stimulus, President Obama is not happy with just another $80 billion in debt for this year. He also requested another $50 billion in deficit spending earmarked for bailing-out state and local governments. Without this “emergency” money, the President claims thousands of government union jobs would be lost. But even among his own party, the President faces an uphill climb. House Majority Leader Steny Hoyer told The Washington Post: “I think there is spending fatigue.” “Bailout fatigue” is more like it. And the President’s envisioned spending spree is full of both.

The Government Union Bailout: $23 billion of the President’s additional $50 billion in spending would supposedly go to keep teachers in the classroom. This new spending would be in addition to the nearly $100 billion appropriated to the Department of Education by the President’s $862 billion stimulus bill, of which $34.7 billion in education funds remains unspent. Meanwhile, over the past decade student enrollment has increased only 6% while the number of teachers in the classroom has risen 15.8%. But over this same period, studies found no correlation between reduced class sizes and student achievement. More federal funding is unlikely to increase student achievement and will not provide a long-term solution to states’ budget shortfalls. Another bailout from Washington could even exacerbate states’ fiscal problems by creating disincentives for states to tackle out-of-control spending and make real education reforms. (more…)