Posts published in “Connecticut Newspapers”

Friday before Christmas, Congress passed a massive $1.7 trillion omnibus spending bill for fiscal 2023. Lost in the furious debate about the overspending involved was the fact that the $1.7 trillion entails only discretionary spending. There’s another $4 trillion-plus of annual spending, which is mandated by law. Social Security spending alone will exceed $1.3 trillion this fiscal year. Total annual federal spending in fiscal 2023 will far exceed $6 trillion.

The nation is spending well beyond its means. The nation ran a $1.4 trillion deficit in fiscal 2022, following a $2.8 trillion deficit in fiscal 2021 and a $3.1 trillion deficit in fiscal 2020. That’s $7.3 trillion in just three years. If, as many economists predict, we enter recession this year, the annual deficit will begin to rise again.

Deficits, of course, mean that we have to borrow to finance spending. Over the past three fiscal years, the national debt exploded from $17 trillion to over $24 trillion.

Few people noticed, because interest rates were near zero, so there was little cost to this borrowing. Once the Federal Reserve began hiking interest rates, everything changed.

For many Trump supporters, it was his policies that mattered. We suffered and endured his behavior, just as much as anyone else. Indeed, the headline in one Wall Street Journal oped read “The Only Good Thing About Donald Trump is All His Policies.”

Now, we can have his policies without his boorishness, and without the unfair vitriolic anti-Trump diatribes from the left, most of the media and from Republican Never-Trumpers. Trump inspired a whole cadre of impressive Republican presidential prospects, someone of whom is likely to carry the day in 2024 and carry his policies into the future, albeit with different possible successors having different notions of “all policies.”

Ned Lamont won a convincing victory in last week’s election. Congratulations are in order. Citizens should extend him the same honeymoon that his challenger would have enjoyed.

Yet, we must turn our attention to the future and the looming challenges we face.

First, the state is facing a serious decline in revenue.

Second, following on the heels of the costly recent SEBAC 2022 wage deal, state employee unions are going to come looking for improvements to the benefits side of their contract, which expires in 2027.

Labor always wants more, despite that Connecticut state employees already enjoy among the most generous benefits in the nation. Their health care benefits are the most generous in the nation by far. The negotiations are going to be tough and consequential.

Third, Eversource has warned that electric rates are going to increase 40%, which comes on top of the state’s already stratospheric energy costs. Likely, citizens and businesses will flee the state.

In most elections, an incumbent governor has an extensive record and a vision for the future. Not so in Connecticut’s gubernatorial contest, despite that Democrat Ned Lamont is campaigning as if he is the fiscal savior of the state. He is claiming to have turned a $4 billion deficit into a $4 billion surplus.

That would have happened even if the governor’s office had been vacant.

Lamont had nothing to do with the turnaround, which is temporary in any case.

The Merriam Webster dictionary defines sophistry or sophism as “an argument apparently correct in form but actually invalid.”

This definition describes perfectly a recent newspaper headline that ran in several Connecticut newspapers in mid-September reading “CT on pace for another multibillion-dollar budget surplus.”

The subtitle got specific: “Early projections from Gov. Lamont put state nearly $2.3 billion in the black this fiscal year.”

Certainly, the headline implied the “multibillion-dollar budget surplus” was a marvelous new development.

It wasn’t and isn’t. The surplus was forecast in early May when the official state budget was enacted.

The newspapers knew, or should have known, this.

A genuine news focus would have been the suspect nature of that stale forecast, given the plunge in the stock market upon which the state relies so heavily for income tax revenue.

Ned Lamont would have voters believe that he has engineered a “Connecticut Comeback.” On his campaign website, he claims to have turned a $4 billion deficit into a $4 billion surplus.

Lamont has had nothing to do with the temporary improvement in the State’s condition. The transitory improvement is based upon billions and billions of one-time federal assistance that will run out in a matter of months and upon a gusher of individual income tax revenue derived from a stunning decade-long stock market rally that ended nine months ago.

Lamont did have one critical task. He had 100% control over the negotiation of the new state employee wage contract, the SEBAC deal. Over the next decade that deal will cost the state an estimated $6.4 billion.

Joe Biden, supposedly a moderate, has become Bernie Sanders without much realizing it. Bernie Sanders and progressive Democrats have long advocated free college. Yet, most Americans understand that there is no such thing as free college any more than there is free lunch. Someone always has to pay.

Biden has now proposed cancelling much of the cost of college after the fact.  What’s the difference between up-front free tuition and after-the-fact tuition cancellation, aka loan forgiveness? There is none, if you think about it.

Taxpayers will have to pay.