Colvin Criticizes the Government’s Pork Barrel Spending. (Photo Credit: flickr.com)
The following is an opinion contribution and reflects the author’s views alone.
With the passage of nearly $6 trillion in federal COVID-19 relief spending, we should be vigilant of the great potential for the misuse of funds. For context, here is an excellent visualization of the US national debt as of 2017.
Political pork spending has a long and storied history in the United States, from the infamous bridge to nowhere to the line item in a recent stimulus bill that gave $15,000 to study drunk mice.
Pork barrel spending severely damages the economy and turns federal politics into a contest of interest groups. Among other things, the most recent COVID-19 relief bill, the so-called “American Recovery Plan Act,” set aside only less than 9% of the total funds for direct COVID-19 mitigation efforts. This 9% is intended to cover vaccine purchases, vaccination efforts, testing, a jobs program, and other measures directly associated with health care. The rest of the bill does not effectively counter the crisis at hand, like the multi-billion dollar grant bailout for the airline industry.
While potentially helpful for some, direct-to-citizen payments are an ineffective method of economic stimulus. These payments are simply a crude modern political implementation of Panem et Circenses.
This bill tips the country over the edge, surpassing the post-WWII national debt as a percentage of GDP. (Figure from the Congressional Budget Office’s 2021 Long-Term Budget Outlook)
We are placing debt on the next generation’s shoulders which we would never pretend to pay ourselves. According to the Congressional Budget Office’s 2021 Long-Term Budget Outlook, the US deficit’s economic consequences are quite grim. Spending on entitlement projects will triple the Federal income growth through the year 2050.
Our deficit for 2021 is already projected to be the second largest as a percent of GDP (after 2020).
Among the most heinous line items is a nearly $90 billion bailout of multi-employer Union Pension funds. Essentially, the unions promised their workers unrealistic pension returns based on an annual interest rate of 7-8 percent. Because of their mismanagement, 96% of the funds are less than 60% funded despite a long bull market and historic stock gains.
This funding is a drop in the water of the funds’ shortfalls of $673 billion in 2017. Only ~180 pension funds will be eligible for this relief, 50 of which are directly tied to the Teamster Union, whose political spending and contributions in 2020 was over heavily skewed towards Democrats. By the bill’s provisions, only the worst managed pensions are eligible, essentially rewarding pension managers who underserved their clients.
Worse yet, this opens the door towards taxpayer backing of these failed funds’ entire pension debt, along with supporting public sector pensions, which could exceed $45,000 in debt per American citizen.
This is much like the whopping $350 billion in unneeded state and local aid based on population and unemployment rates. This effectively funds Democrat-run states that toed the line and held strict lockdowns instead of the states that took a more measured approach to COVID-19 restrictions.
New York, which mismanaged its COVID-19 response with classic NYC grandiose fashion, had over 15,000 unnecessary fatalities due to Cuomo’s nursing home policies. Despite this failure, NY is receiving more COVID-19 aid (1.3 billion) than its more populous conservative counterpart, Florida. Florida has managed COVID-19 better than New York, despite having an older and thus more at-risk population.
States will be overfunded for the COVID-19 deficit by 116 times their revenue losses. This is especially concerning when viewed in the context of Milton Friedman’s comment that “Nothing is so permanent as a temporary government program.”
At times the line items seem borderline satirical, like the $10 million dollars for gender programs in Pakistan and $35 million for federal abstinence programs that somehow finagled their way into the omnibus Consolidated Appropriations Act passed under Donald Trump’s purview. Perhaps Congress should look into debt “abstinence” rather than hazarding our futures to sustain pet projects and political power.
An earlier COVID-19 bill allocated $78 million for Somalia and $800+ million in grant and loan funding for Sudan, $110 million of which is made available “notwithstanding any other provision of law.”
Somalia has a disastrous recent history, with 23 years of war crimes and violence causing nearly 500,000 civilian deaths. Can we trust that such direct fund transfers will be used responsibly by the current shell of a Somalian government? I think not.
Sudan, on the other hand, uses child soldiers and is a “source and destination country for men, women, and children subjected to forced labor and sex trafficking,” according to the World CIA factbook. These seem like the kind of stable governments we can trust to use U.S. taxpayer funds appropriately.
Finally, we have nearly two billion dollars in funding for the various organizational parts of the World Bank, which may have helped fund the “schools” used to retrain the Uighur population in China.
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Thanks to this ballooning of the national debt, we can look forward to “boost[ed] federal and private borrowing costs, slow[ed] the growth of economic output, and increase[d] interest payments abroad. A growing debt burden could increase the risk of a fiscal crisis and higher inflation as well as undermine confidence in the U.S. dollar, making it more costly to finance public and private activity in international markets,” according to the Congressional Budget Office’s 2021 Long-Term Budget Outlook.
Personally, I worry that unless we attend to the issues of pork-barrel bills and oversized appropriations, we hazard our future as a nation, rolling the dice and hoping our fiscal chickens don’t come home to roost.
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