Commentary: A Tsunami of Bad Policy
This commentary appeared in The St. Louis Post-Dispatch on December 7, 2021
Inflation has reared its ugly head again—hitting a 30-year high of 6.2 percent, which is more than triple the Federal Reserve’s definition of stable prices. Unfortunately, the wayward policies that have contributed to soaring prices, pervasive shortages, and sputtering growth are not going away. In fact, they are poised to get a whole lot worse.
President Biden signed the first of two giant spending bills into law on Nov. 15. That was the $1 trillion “Infrastructure Investment and Jobs Act.” The second bill is the administration’s proposed Build Back Better Act, passed by the U.S. House of Representatives a few days later and now pending before the Senate.
Taken together, we are looking at a potential tsunami of bad policymaking. Let us count the ways the two pieces of legislation threaten our nation’s freedom and prosperity:
#1. The infrastructure act is only partially about infrastructure as most people think of it. For example, the law spends only $110 billion on fixing roads and bridges—barely putting a dent in the maintenance backlog—while Amtrak alone will get 60 percent as much as all of America’s bridges and roads combined. Yes, that Amtrak—the one that has consistently run operating losses almost every year for the past 50 years. Tens of billions of additional dollars will go into public transportation even though only five percent of Americans rely on public transit in commuting to work.
#2. Also under the infrastructure act, the government says it will make “the largest investment in clean energy transmission and grid in American history,” and it calls for “building thousands of miles of new resilient transmission lines to facilitate the expansion of renewables and clean energy.” Wind and solar have been lavishly supported for decades, but still only account for 11 percent of U.S. electrical power generation, and their actual role is much less than that because they are intermittent. Does anyone seriously think they can come anywhere close to replacing gas and coal as the primary source of 60 percent of electrical power generation and be equally cheap, reliable, and easy to use?
#3. Then, too, as part of the green energy component of the “infrastructure” plan, the federal government will mastermind the building of a network of 500,000 electric vehicle charging stations, thereby not only putting taxpayer money at risk, but also putting the federal government in the position of picking winners and losers among America’s small-town communities through its choice of where to put those stations. The survival of local communities may soon depend increasingly on Washington, D.C.’s whims.
#4. The proposed Build Back Better Act would permanently and dramatically expand the welfare state and abolish work requirements as a condition for receiving aid. There would be some “free money” for taxpayers at all levels of income. The wealthy would get theirs in the form of expanded state and local tax (aka SALT) deductibility. The top current deduction of $10,000 isn’t much for a top-one-percenter living in an expensive house in a spendthrift, high-tax state like California or New York. Build Back Better includes an eightfold expansion of the maximum SALT deduction to $80,000. The typical taxpayer would get no benefit, while top earners would receive an average windfall of nearly $23,000. The Build Back Better Act would also permanently enshrine the Biden administration’s reimagined Child Care Tax Credit, which would allow a family to receive thousands of dollars a year ($3,600 per child under age 6 and $3,000 per child at 17 and under) in government cash with zero earned income and no expectation whatsoever of anyone having to seek a job.
#5. Adjusted for a lot of gimmickry, a close reading of the bill shows that it would result in nearly three trillion dollars in cumulative budget deficits over the next decade. Claims that the bill will not add a dime to deficits and debt are entirely spurious.
To sum up, what we have here is an overarching vision for transforming America. It would concentrate more decision-making power in the hands of the central government. And it would turn what has been a society of producers, workers, and investors into a society of people and institutions (including unions, businesses, schools, and an enlarged army of social workers and activists) whose livelihoods depend on what government gives them.
Medicaid Expansion Fuels Enrollment Growth
In the first two months since the state expanded Medicaid eligibility, nearly 25,000 Missourians have enrolled in the program. This brings Missouri’s Medicaid enrollment to the highest point in state history, with more than 1.1 million recipients of state-sponsored health coverage.
A growing Medicaid program is nothing new for Missouri. Enrollment has crept higher in each of the past 21 consecutive months, dating back to the beginning of 2020. In that time, the program’s rolls have ballooned by more than 31%. In fact, enrollment in every single eligibility category (adults, children, elderly, persons with disabilities, pregnant women, etc.) has grown significantly over the past two years.
Keep in mind that program enrollment is the single biggest driver of Medicaid costs, which is a big part of why I was so concerned about Missouri expanding the troubled program. Even before Medicaid expansion went into effect, our state already expected to spend more on the program this year than ever before. In total, the program cost more than $11.5 billion last fiscal year, which was nearly 37% of the state’s budget. This year it’s expected to eclipse $12 billion for the first time.
Of course, the Medicaid program has been severely impacted by the COVID-19 pandemic. In response, the federal government approved multiple relief packages that include supplemental Medicaid funding. But this federal “relief” is now contributing to the state’s continued program growth. One of the early relief bills, the Families First Coronavirus Response Act, included a provision prohibiting states from removing anyone from Medicaid coverage unless the recipient asked to be removed or relocated out of state. This means that Missouri’s Medicaid agency stopped checking whether those already enrolled in the program were still qualified to receive services. Unsurprisingly, enrollment has increased in every month since, and it’s unclear when the agency will be allowed to resume eligibility redeterminations.
As I’ve written before, it’s long past time for Missouri’s elected officials to take the steps necessary to reform the state’s Medicaid program. Rooting out unnecessary spending in the Medicaid program should have been a higher priority before expansion, but now that continued enrollment growth is all but assured, it’s a necessity. How much longer can state taxpayers afford to foot the bill for this runaway spending?
Year-end In-and-out list
It’s that time of year. Time to look at past trends and future forecasts to decide what’s in and what’s out in fashion, music, food, words, etc. This list is about public education, and some of it’s aspirational, but here we go.
In: letting parents find an education setting that works for their families
Out: giving every student just one assigned option
So many reasons have popped up for this one in the last year or two. Parents want their children and everyone around them masked. Parents don’t want their children to have to wear a mask all day. Parents want everyone vaccinated. Parents want vaccination to be a personal choice. Parents like, or don’t care, about their school’s curriculum. Parents care a lot about their school’s curriculum. Regardless, the single, assigned option is “out” and letting every family avail themselves of at least one alternative is “in.”
In: school board meetings that include parents and the community
Out: school board meetings with no one but the board in attendance
People have discovered an interesting fact in the past year—school boards actually impact what happens in school buildings, including selecting curricula. Who knew? School boards create textbook selection committees. They hear from textbook publishers. They weigh the options and approve curricula. A broader understanding of their role will (hopefully) make broader participation in their decisions “in” and forgetting they exist “out.”
In: innovative new learning environments
Out: every student learning in a room with a teacher at the front and 20 other students
When schools shut down, parents didn’t just go along with that program. They joined with other families and created micro-schools in someone’s basement. They sent their children to karate academies or churches for guided virtual learning. They decided to join the homeschool movement. They founded Boys and Girls Clubs, or some other nonprofit, that morphed into an outright school. Necessity is the mother of invention, and public education became inventive. The 1950s education model got tossed “out” in favor of bringing “in” new models of learning.
In: giving teachers autonomy and flexibility
Out: step-and-ladder pay scales
School shutdowns also affected teachers. Some teachers didn’t like teaching virtually; others loved it. Some teachers discovered that teaching just ten students in a micro-school means applying skills more directly, and no staff meetings or red tape. There is a massive opportunity for good teachers to take on gig work as tutors. Joining a school district at the age of 23 and staying in the same district until the age of 55 to be “taken care of” with a pension until death is so “out,” and teachers as entrepreneurs who can be paid directly to teach is “in.”
This list could go on. The bad news is that we are in the middle of a tough road back to recovering learning loss for so many students. The great news is that we’ve been forced change some of the old ways of doing things in favor of parent empowerment and engagement, systemwide flexibility and autonomy, and the notion that one size definitely does not fit all.
Joplin Students Learn About Food Trucks and (Perhaps) Government Regulations
Students in a Joplin-area high school recently engaged in the school’s annual “Food Truck Competition.” In this event, student teams design miniature food trucks, construct a sample menu, and prepare some of the foods from that menu for a taste testing. The entire event sounds like a great, fun project for the students to learn about design, cooking, and hopefully future entrepreneurship.
If these students do one day get into the food truck business, one thing they will learn about is government regulation. Food trucks in Missouri are overregulated in many parts of the state—sometimes they are outright banned from operating in certain cities. While everyone would agree there are some safety rules that should apply to food trucks, such as not blocking busy intersections or parking in dangerous places, many places still engage in protectionism against them in favor of sit-down restaurants.
In some locales food trucks can operate, but not within a set distance from brick-and-mortar locations. That compromise is better than a total ban, and it may be a political necessity in some cities.
How are the food truck regulations in Joplin that these students may one day encounter? The good news is that the city allows them in the first place, and there does appear to be an active foot truck scene in the community.
But the regulations for food trucks appear to be heavy-handed. Don’t get me wrong, I know they are heavy-handed for restaurants, too. The obsession with “safety” in health regulations has led to things like banning popular (and perfectly safe) bake sales at schools. For example, in Joplin’s regulations I fail to see why a food truck has to:
“report to an approved commissary daily for servicing, food prep and cleaning”
There are other regulations on the list that seem unnecessary, but that is typical for the field.
But at least Joplin kids will be able to operate a food truck if they so desire, getting a real-world education in government regulations at the same time.
You Will Accept This Welfare Check Whether You Want It or Not
The Section 8 housing voucher program is a well-known federal program that subsidizes rental payments for low-income households. It is one of many government welfare programs. For people like me, who believe that the welfare system has a role but also has negative effects, the Section 8 program is far down on the list of programs to object to. It helps people who need housing by working with the private sector in a voluntary capacity. Landlords can choose to participate in it or not, according to federal rules.
But that is not good enough for certain Missouri cities that won’t be content until we are all forced onto the dole.
Maplewood is the latest city to consider passing a “source-of-income” law compelling landlords who operate in that city to accept Section 8 housing vouchers as payment. It would be illegal to decline to rent to people in the program, even though it is a federal program and federal law allows landlords to choose to participate or not. The City of St. Louis, Clayton, and Webster Groves are the three cities in Missouri that currently have these laws. Kansas City has considered it, but thankfully not passed it.
Cities cannot, and should not, be able to tell doctors within their boundaries that they must take Medicaid patients. Cities should not be able to force grocery stores to take food stamps. Clearly, most grocery stores choose to, just like many landlords choose to participate in the Section 8 program, and many doctors and hospitals serve Medicaid patients. I can’t find any examples in Missouri of cities that compel food stamp acceptance, but feel free to share with me if there are (so I can go oppose it). For food stamps, the debate is more about what you can buy with the program, not where you can buy it.
You might — believe it or not — as a landlord, store owner, unemployed person, disabled person, or anything else, choose not to accept a government welfare check or join in a certain program. You have, and should continue to have, that right. Cities with “source-of-income” rules are basically like Marcellus Wallace telling the Harley-Davidson riding, sword-wielding watch-enthusiast/boxer Butch Coolidge what he should do with his sense of pride.
The fact that Marcellus is a mobster just makes the analogy more delicious. These “source-of-income” rules are relatively new to Missouri. But new or not, they are wrong. The state should not compel anyone to participate in a welfare program if they don’t choose to, and this includes landlords. Maplewood should reject this proposal (which has not yet been introduced as a bill). If cities continue to adopt such laws, the state legislature needs to step in and prevent it like they did in Texas.
Extend Telemedicine Again
Once again, action is needed to protect Missourians’ access to telemedicine. A little more than two months ago, I wrote about the good news when Governor Parson issued an executive order extending the regulatory waivers on various telemedicine restrictions that have been in place since the beginning of the COVID-19 pandemic. However, those waivers are set to expire at the end of the year, which is now rapidly approaching.
As I’ve written in the past, telemedicine has been an important part of Missouri’s response to COVID-19, and unfortunately, our state is still dealing with the coronavirus. Prior to the pandemic, state rules and regulations made accessing health care providers remotely more difficult than it needed to be. Telemedicine has become an increasingly popular option among providers and patients alike in the 21 months since these restrictions were lifted.
The growth of telemedicine over the past two years has been staggering. Recently, the chief medical information officer for BJC Medical Group testified in Jefferson City that more than 190,000 patients used its telemedicine services in 2020, up from only 4,000 in 2019. That’s a 4,750% increase in one year! Given telemedicine’s rapid growth, our elected officials need to ensure that access to these services can continue.
Of course, the best way to protect access to telemedicine would be for Missouri’s legislature to remove the currently waived regulations permanently. And as we head into the 2022 legislative session, I’m hopeful this will finally be the year our elected officials do just that. But until then, an executive order is the only way to preserve access to telemedicine.
Is SALT Really a Priority for Schools Right Now?
With families enduring yet another chaotic school year of mask mandates, vaccination mandates, school closures, and shortages of substitute teachers and bus drivers, you would think that the teachers unions would be up to their eyeballs trying to figure out how to get things back on track. Nevertheless, the president of the American Federation of Teachers found the time to join a protest on the steps of the U.S. Capitol. And what was the protest for? Why, to bring back the deductibility of state and local taxes on federal tax forms, of course.
The reason that the president of a teachers union is joining forces with the bipartisan SALT caucus is that taxpayers are more willing to raise state tax rates if they can at least deduct what they pay to the state from their federal taxes. If they can’t deduct state taxes, then they prefer to keep them at a minimum, thank you very much. Same goes for local property taxes. And why does the teachers union want higher state and local taxes? So that more resources can be directed at teacher pay and teacher pensions. The education establishment is taking time to throw support at having everyone pay more out of their pockets to support and grow the education establishment.
Teacher pay, teacher recruitment, and teacher retention are also on the list of legislative priorities for the Missouri State Board of Education. The board would like to see legislatively mandated minimum starting salaries of $35,000 for teachers by 2024. In addition, $50 million in federal stimulus funds have been directed at recruitment and retention.
It’s true that having a high-quality teacher in every classroom is one of the few things that can have a positive impact on academic achievement. But do we get there by protesting for higher state taxes for everyone? Do we get there by paying every teacher more, regardless of their effectiveness? Do we get there by perpetuating a costly and outdated system of retirement that often pays teachers for more years of retirement than working years?
Stuck In the middle of all this are the 65 percent of Missouri students who were not at grade level on the state math assessment last year. Also in the middle are students with disabilities who did not receive any services when their schools shut down, along with the parents who desperately want tutoring for children who have fallen behind these last two years. It’s a sad state of affairs when public education starts to look like a battle between those who support teachers and those who support families.
Property Tax Bills are Here, MO’s Business Climate, and Elon on Subsides
David Stokes. Corianna Baier and Jakob Puckett join Zach Lawhorn for the final SMI Podcast of 2021.
