What is the worst feature of the stimulus package and other legislation being considered by Congress? It is the systematic attempt to undermine 25 years of reform of social institutions — reforms designed to liberate the lowest-income families from welfare state programs that trap them and make them perpetual wards of the state.
She Works Hard for the Money
Here are some specifics:
- Ending the D.C. school voucher program. The city spends more and has worse outcomes than anywhere else in the nation. In taking on the teachers unions and turning things around, Michelle Rhee, chancellor of D.C. public schools, has gained national attention and even drawn praise from Barack Obama. Provisions buried in the stimulus package, however, will send 1,700 children who now attend private schools back to the failing schools from which they previously escaped.
- Ending the Milwaukee school voucher program. It’s the most successful school voucher program in the country and the teachers unions and many liberals can’t stand it. The stimulus package showers money on Milwaukee for new school buildings — even though existing ones are sitting empty — but prohibits spending a dime of it to support private education.
- Undermining welfare reform. It’s the most successful public policy reform in modern times — cutting the welfare rolls in half and helping people be responsible, self-supporting citizens. The stimulus bill intentionally encourages states to increase their welfare rolls, undermining successful reforms.
- Undermining unemployment compensation reform. Over the past several decades, successful state reforms have reduced unemployment and moved people more quickly into new jobs. The stimulus package would reverse some of those gains.
- Undermining (private) Medicare Advantage plans. These plans give low- and moderate-income seniors access to the same types of plans accessible to every other American. Without them, seniors will have to pay three premiums to three plans (Medicare Part B, Medicare Part D and Medigap) and still not have the coverage younger Americans take for granted. [Read more about the critical role the Medicare Advantage program plays in providing low-income and minority Medicare beneficiaries with access to health care.]
- Undermining children’s health insurance. Based on estimates of the Congressional Budget Office (CBO), of the 4 million children expected to newly enroll in SCHIP, 2 million will lose their private coverage in the process. The problem: While private insurance gave them access to most doctors and facilities, SCHIP typically pays below-market rates and creates access problems as a consequence.
- Undermining free labor markets. A labor union has only one real purpose: to monopolize the supply of labor to employers and obtain above-market wages and compensation. This can only work to the extent the union can restrict supply and keep potential competitors out of the market. Through the long history of the labor movement, the people excluded have been disproportionately women and minorities, and they are invariably poorer. Card check, mandatory arbitration and other legislative goals of organized labor will not help those at the bottom of the income ladder.
- Undermining free trade. The “buy America” provisions of the stimulus package appear to violate international agreements and invite a trade war. These are the very mistakes that made the Great Depression deeper and longer than it would have been otherwise. Protectionism does not help raise the living standards of the poor.
- Taxing the Poor. Despite a “firm pledge that no family making less than $250,000 a year will see any form of tax increase,” people are now facing the largest tobacco tax increase in history. The Obama administration estimates it will raise $38 billion over the next five years. According to Brad Schiller, a pack-a-day, low-income smoker will lose half of Obama’s “Making Work Pay” stimulus tax cut ($8-$10 a week) in higher cigarette taxes. A two pack-a-day smoker will lose all of the tax cut.