Taxation without representation?

Taxation without representation is tyranny, and grounds for a revolution — only many of those being taxed under the Trump federal budget haven’t been born yet.

It is one thing to spend your children’s inheritance. It is another to drive them into debt. We are spending today what they will be earning years from now.

Getty pix

Reportedly, the proposed $4.4 trillion budget for next year will add $7 trillion to the national debt, which is already $20 trillion, over the next decade. Of course, some will argue that is static scoring and doesn’t take into account the additional taxes that should accrue due to the recent tax cuts. Then, neither does it account for possible soaring interest rates on that debt.

Budgeting one’s spending based on the anticipation of a raise is foolhardy.

In 2015 Trump said, “But if we don’t make our nation rich again, we don’t take back our jobs from all these other countries that are ripping us and if we don’t take back our money and we don’t, you know, balance up our budget at least get it damn close and soon we’re not going to have a nation anymore.”

This is the same Trump who the next year who disputed his own comments about the nation defaulting on its debt by saying, “First of all, you never have to default because you print the money.”

Welcome to Zimbabwe.

 

 

 

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Newspaper column: Lawmakers must finally address public worker retirement reform

Gov. Sandoval gives State of the State speech. (R-J photo)

Gov. Sandoval gives State of the State speech. (R-J photo)

In his State of the State speech this past week Gov. Brian Sandoval tossed out tax money like trinkets and candy from a Mardi Gras parade float — a couple million here for this or that education program, a few million there for a veterans’ home, millions for a medical school, more millions for an engineering school and pay raises for state employees.

“This session, my budget includes a 4 percent cost of living adjustment and increased funding for health benefits to recognize the shared sacrifice and dedication of our state employees,” the smiling governor said about his spending proposal for the coming two years.

Overall, Sandoval proposed a 10 percent increase in the general fund portion of the state budget, even though the cost of living increase for 2016 was only 2 percent.

What the governor did not address was how the taxpayers are going to pay for the commensurately higher retirement pensions that are tied to the salaries of those state employees.

Nor did he take note of the fact his proposed budget — total budget, not just the general fund — is 49 percent higher than the total budget he proposed when he first took office, while over the past decade the Nevada median household income has fallen 17 percent.

A part of the growth in state government spending has been due to burgeoning pensions for state employees, who upon retirement are guaranteed a percentage of their highest salary level — which officially is 70 percent after 25 years, but can often top 100 percent after various pay add-ons and gimmicks are employed. Public employees in Nevada can retire in their 40s and get paid more in retirement than they were paid for actually working.

In 2008 the Las Vegas Chamber of Commerce called on the Legislature to change public employee retirement benefits from the current direct benefit plan to a direct contribution plan, similar to a 401(k), because the expenditures were growing at an unsustainable pace.

In 2011 a report drafted for the Nevada Policy Research Institute by Andrew Biggs, an economist with the American Enterprise Institute, concluded the Nevada Public Employees’ Retirement System is vastly underfunded by more than $40 billion.

“What people don’t realize,” Biggs said to a luncheon audience back then, “is your typical public sector pension plan is a lot more generous than what a typical person is going to get in the private sector. Let’s just take a person and run their wages through what they would get from PERS versus what they could get from a typical 401(k) plan combined with Social Security, because public employees here don’t participate in Social Security. They both pay the same amount on average. The total contribution is about the same, but the benefits for someone under PERS — for a full career employee — is somewhere around 50 percent higher.”

In 2015 Reno Republican Assemblyman Randy Kirner introduced Assembly Bill 190, which called for reforming PERS, which at the time was costing nearly $15,000 per Nevadan per year and growing.

The changes Kirner proposed would have applied to future state and local government workers and not current ones.

AB190 would have introduced a hybrid — part defined benefit, part defined contribution.

The bill also tied the minimum retirement age for receiving full benefits to that allowed under Social Security, though police officers and firefighters would be able to retire with full benefits 10 years earlier.

Kirner argued his bill would have a minimal impact on taxpayers, but the PERS administration claimed it would cost millions to implement. Kirner withdrew the bill so the funding could be studied and he could re-introduce it again this year, but Kirner decided to not seek re-election.

Instead, state Controller Ron Knecht has offered a bill nearly identical to Kirner’s, but it is questionable whether it will get much of a hearing before a Legislature that is now comprised of majority Democrats in both chambers.

This past summer NPRI’s Director of Transparency Research Robert Fellner released a 36-page report warning that if the economy stumbles the PERS “fantasy economic forecasts will be replaced by immediate bankruptcy — leaving every Silver State household with a sudden, implicit, $50,000-plus tax liability.”

Nevada lawmakers have been kicking this can down the road so long it is now a 55-gallon drum ready to explode.

A version of this column appeared this week in many of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.

What a difference a coast makes when viewing Obama budget

The lede on the Washington Post story, that was used in the Las Vegas newspaper, exclaims:

“President Obama’s $4 trillion budget request, packed with familiar proposals for new spending and higher taxes, landed Monday on the doorstep of a Republican Congress eager to end an era of political gridlock — giving Obama unexpected leverage in coming negotiations.”

The lede on the Los Angeles Times story on the same topic reads:

“President Obama released a $4-trillion budget Monday with liberal priorities that have little chance of passage but will serve as an initial foray in negotiations with the new Republican Congress and help define the Democratic Party in the run-up to the 2016 presidential race.”

So which is it? Unexpected leverage or little chance of passage?

Meanwhile, the Dallas Morning News tried to have it both ways:

“WASHINGTON — The $4 trillion budget that President Barack Obama released Monday is more utopian vision than pragmatic blueprint for his final years in office, but buried in the document are kernels of proposals that could take root even with a hostile Republican Congress.”

And the headline online at Townhall.com reads:

“Dead on Arrival: GOP Rejects Obama’s $4 Trillion Budget.”

Harry’s analogies are over the top

Harry Reid — known for inflammatory rhetoric — is reaching a new nadir the name calling and allegorical overkill.

In prepared remarks posted on his website Monday, Reid called on the House to pass the Senate version of the budget bill:

“Across the nation, people are suffering because of the Speaker’s irresponsible political games. There is still one easy way out – the same escape hatch that’s been available as long as we’ve been a country: a vote. But for the seven days the federal government has been closed for businesses, the Speaker has refused to use that escape hatch.

“The Senate-passed bill to reopen the government while we work out our budget differences wasn’t even my idea. It was the Speaker’s idea. He admits it was his intention all along to pass a clean continuing resolution.”

I believe the House passed a bill before that and Harry will not even bring it up for a vote. What’s he afraid of? That it might pass?

Then Harry quotes from some liberal website comparing the House proposal to delay the ObamaCare individual mandate for a year — the same as was given to corporations by presidential fiat — to arson:

“As Judd Legum, editor-in-chief of Think Progress, pointed out, Republicans have a strange definition of compromise. This is how he explained it. Republicans ask, ‘Can I burn down your house?’ We say no. Republicans ask, ‘Just the second floor?’ We say no. Republicans ask, ‘[Just the] garage? We say no. Republicans say, ‘Let’s talk about what I can burn down.’ We say no. Then Republicans say, ‘YOU’RE NOT COMPROMISING.’”

Harry concludes by saying, “We are willing to negotiate. But we won’t negotiate with a gun to our heads,” and calling on Republicans to “Stop your reckless threats of a default on the nation’s obligations.”

Sharp tongued Harry Reid (Getty images)

This is from the man who, along with Obama, voted against raising the debt ceiling in 2006 while the nation was waging two wars against terrorism.

In 2006 Harry asked Republicans to explain how they could justify adding trillions of dollars in new debt. There is now $17 trillion in debt but that is OK:

“How can the Republican majority in this Congress  explain to their constituents that trillions of dollars in new debt is good for  our economy? How can they explain that they think it’s fair to force our  children, our grandchildren, our great grandchildren to finance this debt  through higher taxes. That’s what it will have to be. Why is it right to  increase our nation’s dependence on foreign creditors?”

Nobody put a gun to his head and made him say that.

This flip-flop has been ignored by the compliant news media that Reid thinks is being too fair. “You and other journalists have a real shortcoming in that you are trying so hard to be fair that you are unfair,” Reid told Politico. “Democrats have had almost nothing to do with the problems here. It’s all Republicans.”

Reid wears so many hats: Senator, politician, bomb thrower, journalism critic.