By Bruce Poliquin
Maine State Treasurer
The lack of honesty and fiscal common sense in Washington is breathtaking. For weeks, spendthrift politicians insisted that our country was inches away from default: they said that on August 2 the federal coffers would run out of cash.
Therefore, the career politicians said they must allow themselves to borrow another $2.4 trillion to pay the bills.
Did they forget that $2.2 trillion of annual tax revenues easily covers $200 billion of interest owed on the $14 trillion national debt? Or maybe it was just too painful to cut enough spending to close this year’s $1.5 trillion budget deficit.
(This is the third year in a row that Washington spent at least $1 trillion more than it collected in tax revenues. The shortfalls have been funded by borrowing money by selling government bonds.)
The reckless elected officials who spent us into oblivion are now boasting about the debt ceiling “deal” that saved us. Let’s see: Allow another $900 billion of borrowing now in return for promising to cut spending by that amount over 10 years. In other words, “Trust us now. We’ll make it right later.”
We’ve been down this path before. The result has been a $14 trillion national debt that’s draining life from our economy with no plan to pay it off.
This debt ceiling “deal” is not good for anyone, except the politicians who crafted it. It doesn’t fix the two major problems that are drowning us in fiscal imprudence: preventing Washington from spending what we don’t have; and addressing the $14 trillion national debt. What an embarrassing missed opportunity.
Maine and Washington, thankfully, are heading in opposite fiscal directions. Maine state government’s new path is healthy; the federal government’s is poison. During the past seven months:
• Maine reduced its public pension debt by $1.7 billion. Washington refuses to reduce any of its $14 trillion national debt.
• Maine paid off $250 million of hospital debt accumulated by the last Administration. Washington’s debt is projected to balloon by another $7 trillion to $10 trillion over the next decade.
• Maine cut future spending by roughly $200 million per year over the next 17 years by eliminating 41% of the public pension debt. Washington refuses to reform the national pension system, Social Security, which is bankrupting the federal budget.
• Maine lowered taxes by $150 million, the largest reduction in state history. Federal taxes will likely rise to “pay for” the growing national debt.
• Maine started reforming its welfare programs to require more personal responsibility. Washington keeps providing incentives for states to swell their welfare rolls.
• Maine is driving down health insurance premiums by introducing competition among health insurance companies. The new federal health care law, if it survives the Supreme Court, is projected to increase health insurance premiums.
• Maine is pushing to lower energy costs by exploring all options including natural gas pipelines. Washington won’t allow full development of our domestic energy resources.
• Maine is simplifying business regulations to make it easier and less expensive to operate a company here. Federal over-regulation forces companies and jobs overseas.
• Maine is embracing transparency in state government, like investigating possible corruption at the Maine Turnpike Authority. Transparency starts with telling the truth about our problems, Washington.
• Maine’s Constitution requires an annual balanced state budget. Most Washington politicians fight such an amendment to the U.S. Constitution.
• Maine no longer uses gimmicks to balance the state budget. Washington invents them.
Not bad for a new Adminstration that has been on the job for only seven months. The feds can learn a lot from Augusta’s new fiscally prudent leadership team. Stay tuned.
For more information, see www.maine.gov/treasurer/outreach/blog.shtml.