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29.1.09

Wasteful windfall handling provides litmus test of Jindal

Like a Cyclops, Democrats are prepared to release a tunnel-visioned spending plan that debauches the economy and country. Making sure no government spending is left behind, it redistributes wealth to those who have not earned it, spends money on a potpourri of liberal causes that have nothing to do with the economy, and resorts to a New Deal strategy that not only failed to produce economic growth, it prolonged economic doldrums. But when it passes Louisiana stands to gain $5 billion regardless of the massive debt (over 10 percent increase total, or another $3,800 for every citizen) it imposes upon the citizenry and the economy. The question then becomes, what does Gov. Bobby Jindal do?

The state will not (can not, in fact, legally) turn down this money when diverted from taxpayers to it. But the Republican governor, whose partisan colleagues to a man voted against the bill in the House, will have to decide how the receipt of this money will affect his policy preferences. Just as one example, the state’s Medicaid program could gain $1.5 billion over the next three years, which could offset the $771 million the federal government says the state owes for gaming the system over the past decade and provide enough to transition into a defined-contribution plan away from the current open-ended fee-for-service arrangement that could save the state hundreds of millions of dollars a year and provide comprehensive coverage of the indigent.

The question is whether Jindal will use any monies that work their way into the state’s operating budget as a crutch to offset needed reductions in state government spending. With the enthusiasm Jindal seemed to exhibit in rapidly addressing the forecast deficit in the state’s budget this fiscal year, one may have thought the crisis released his inner conservative cutter of the size of government, meaning the situation would produce a good political opportunity to cut out spending of marginal worth in state government.

But that is hard work, identifying this spending, then bucking political forces who advocate big government to reduce it. Not only is it so much easier to let “free” but temporary money pour in to avoid hard decisions but doing so would allow Jindal to do the convenient thing, i.e. spend as usual and build a reelection campaign on the basis that the existing stuff still was provided at no cost in Louisiana taxes (federal taxes are another matter), instead of the right thing of reducing government that would empower productive citizens and economic development at government’s expense.

No matter what rolls in, Jindal needs to remain committed to shrinking the size of government. He must take the windfall and deploy it to cushion the transition to smaller government, whose reach will be smaller but whose coffers will soon go up in amounts if government backs off taxation and regulation of much business in the state. This issue therefore will provide a litmus test of the conservative credentials of Jindal.

2 comments:

James S said...

Louisiana will actually receive more than ACORN??

I'm afraid the legislature will have a large say in how any future windfall is spent. If we're lucky Jindal can attend to some real needs before they get their hands on it...

Anonymous said...

Why don't all of you ask Gov. Jindal to save money by taking a pay cut or reducing his salary to one dollar a year. He could reduce its staff and give back the billions the state of Louisiana took for rebuilding of the levies. I consider that to be wasteful spending. Gov. Jindal should refuse all future disaster aid and stimulus monies in the future.