Another Government Bailout

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The House is scheduled to pass another $26 billion bailout for state and local governments on Tuesday. The legislation provides another $10 billion for education and $16 billion to extend the increased share of Medicaid being paid for by the federal government since passage of the stimulus.

Congressional Democrats say the measure is paid for with a combination of spending cuts elsewhere and tax increases. However, the new spending is front loaded and much of the spending cuts wouldn’t be realized until after 2013. For example, the Congressional Budget Office’s score of the legislation shows savings from the food stamps program of $12 billion from 2014-2018. Congress can come back any time before that and rescind the cuts.
 
Regardless of whether the bailout is paid for, it represents a continuation of bad policy. White House chief of staff Rahm Emmanuel claimed “We had a choice…Either teachers could be in the classroom or they could be on the unemployment lines.” Not to be outdone with the demagoguery, Education secretary Arne Duncan called Wednesday’s passage of the bill in the Senate “a great vote for American children.”
 
It might have been a great vote for the public teacher unions. However, America’s children are being set up for a lower standard of living thanks to the mounting debt the administration is fueling. The federal government is already on track to spend a record $61.5 billion on K-12 education subsidies this year despite the fact that federal involvement in education has been a complete failure.
 
Two charts from Andrew Coulson illustrate why mortgaging our children’s future to protect public employees is a rotten deal:
 
 
 
 
Neal McCluskey explains what the charts make obvious:
 
Now, let’s be clear: This is not some wonderful crusade all about helping “the children.” It is pure political evil, a naked ploy to appease teachers’ unions and other public school employees that Democrats need motivated for the mid-term elections. It has to be, because the data are crystal clear: We’ve been adding staff by the truckload for decades without improving achievement one bit. Since 1970 (see the charts below) public school employment has increased 10 times faster than enrollment, while test scores have stagnated.
 
Click here for more on federal K-12 education subsidies. Also see this paper on public sector unions and the costs of employee compensation.