The President’s address on the BP oil spill yesterday fell flat, and earned scorn from some unexpected places. As we’ve written before, talking tough about exacting retribution from BP does nothing to stop the leak.
The President also used his address to promote a tax on energy, which would be another job killer from an Administration that seems content to destroy private sector jobs so long as it can add government workers to the roles.
Certainly that’s the sense you get from the President’s latest “stimulus” proposal, which centers on sending money to the states to prevent states and localities from making budget cuts, particularly cuts that might eliminate public sector jobs, like those held by members of the teachers’ unions.
Charles Lane, writing for the Washington Post, does a great job dissecting the claims that the President is using to justify another bailout of the states. He writes:
Start with that scary number of 300,000 teacher layoffs, which has been bandied about in numerous newspaper articles. The sources for it are interested parties: teachers unions and school administrators, whose national organizations counted layoff warning notices that have already been sent out this spring and extrapolated from there. Notably, however, even these sources usually describe the threatened positions as “education jobs” – not teachers. That’s because the figures actually include not only kindergarten through 12th grade classroom instructors, but also support staff (bus drivers, custodians, et al.) and even community college faculty. And 300,000 is the upper end of a range that could be as low as 100,000. Nationwide, there are about 3.2 million K-12 public school teachers….
Given these facts, it’s unclear how the bill’s supporters came up with its $23 billion price tag. It works out to about $77,000 per job saved in the 300,000-layoff scenario, but $230,000 per job if only 100,000 jobs are at risk….
But what about class size? Well, 300,000 teacher layoffs would increase the national student-teacher ratio in public schools from 15.3 to 1, to 16.6 to 1 – roughly where it was in 1997. And 100,000 teacher layoffs would increase it to 15.6 to 1 – the 2005 level. Neither number portends educational apocalypse, especially when you consider how uncertain the links are between class size and student achievement. Student-teacher ratios shrank by roughly 10 percent nationally between 1996 and 2008, but reading scores on the National Assessment of Education Progress stayed essentially flat. Newark, for example, has a student-teacher ratio of only 10.7 to 1 – and the poorest test-score results of any public school system in New Jersey.
So allowing teacher layoffs to continue isn’t exactly going to destroy our public education system, and the potential spending reductions would only bring spending levels back down to what they were a couple years ago-hardly draconian times.
Nicole Gelinas goes further writing that the state bailouts aren’t just unnecessary, but are counterproductive. They allow states to avoid necessary budget cuts, encourage unions to fight any proposed reductions in scheduled benefit increases and pay raises, and make states more dependent on federal money to make ends meet in future years. She focuses on the stimulus’s effects on New York, writing:
All the “temporary” stimulus did was let the politicians off the hook: No need to make politically tough cuts to get the fisc under control; just keep increasing outlays as if financial bubbles would keep saving us forever.
This has left New York worse off in two obvious ways:
* Obama and Congress took away the leverage City Hall and Albany would have had over intractable labor unions. With Washington minting up free money, teachers and other city employees knew last year that they didn’t really have to give an inch on raises and benefits.
Bloomberg has used the threat of layoffs, for example, to get public-sector workers to negotiate. But while the city has cut 6,082 jobs in the last year, the 262,661-strong payroll is still 4,900 people above 2006 levels — because Washington came in to “save” us.
* Washington allowed New York to load itself up with more debt. The stimulus bill also created new, subsidized “Build America Bonds” — which New York has used to borrow $4.4 billion. The city’s total bond debt is now nearly $68.4 billion, up by more than $7.9 billion since the start of the financial crisis.
With the stimulus running out, Bloomberg has been sounding tougher. Last month, he zapped planned raises for teachers, for example; earlier this year, he told other unions that they shouldn’t expect pay hikes without big productivity improvements.
Enter Obama, with another bailout. In his Saturday letter, the president said that Congress’ failure to act would “mean hundreds of thousands of fewer teachers in the classrooms.” Indeed, he claimed, “their lost paychecks will mean less tax revenues.”
Actually, no. Union concessions could prevent teacher layoffs in New York. And labor givebacks would let the state and city avoid new tax hikes — meaning more dollars in people’s pockets, more private-sector job creation and more demand.
It’s irresponsible for Washington to dangle the lure of more stimulus just as states and cities are getting down to crunch time in their budget negotiations. It’s also dangerous — because states and cities will think the money will be there next year, again.
Americans have had enough with Keynesian stimulus: we’ve seen our national debt grow, the number of government workers grow (which is just another taxpayer liability), and unemployment stall at near double digits. Congress should reject more stimulus spending and focus on returning money and power to the private sector.