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We’ve Been Spent Into This Hole
By: Doug Busselman, Executive Vice President
It should seem obvious (although maybe not) it has been spending increases that brought us to the point of having a $900 Million hole in our state budget, not a shortage of taxes. The 2009 Nevada Legislature did increase the tax burden by a Billion dollars (going so far as to override a veto to make it happen). Further expansion of rates or scope of the tax load will not accomplish anything more than a further weakened private sector economy.
We don’t already have enough unemployment or other real world indicators of how badly damaged the private sector’s financial sustainability already is? Wouldn’t the projections of the inability for the taxes assessed to generate the revenue expected be some type of a signal? We should find more ways to inflict greater expenses on the people who pay taxes in order to provide funding for government tax spenders?
Geoffrey Lawrence of the Nevada Policy Research Institute has provided a very telling analysis of how spending increases shot up, starting in 2006, exceeding what would have been connected to a reasonable formula of inflation costs plus population increases.
To a large extent the history of 2003 tax hikes resulting in more available money to spend, seems to have played a role in state government spending more. The same situation repeated itself with the tax increases of 2009 (except the authorized spending increases – presented publicly as “cuts”) are probably going to end up being real reductions because of the hole that has to be filled.
Government hasn’t gotten into the hole it has because taxpayers aren’t being taxed enough – the results show that we’ve got more taxes than can be paid already. Further increases or expansion of the tax burden won’t make what’s already too heavy any more affordable.
Some form of limits on government spending are essential, done either in the form of a restrictive system (like the Tax and Spending Control formula) or through the election of legislators who are more financially responsible than those who have been voting for the spending increases we’ve been getting.
It should seem obvious (although maybe not) it has been spending increases that brought us to the point of having a $900 Million hole in our state budget, not a shortage of taxes. The 2009 Nevada Legislature did increase the tax burden by a Billion dollars (going so far as to override a veto to make it happen). Further expansion of rates or scope of the tax load will not accomplish anything more than a further weakened private sector economy.
We don’t already have enough unemployment or other real world indicators of how badly damaged the private sector’s financial sustainability already is? Wouldn’t the projections of the inability for the taxes assessed to generate the revenue expected be some type of a signal? We should find more ways to inflict greater expenses on the people who pay taxes in order to provide funding for government tax spenders?
Geoffrey Lawrence of the Nevada Policy Research Institute has provided a very telling analysis of how spending increases shot up, starting in 2006, exceeding what would have been connected to a reasonable formula of inflation costs plus population increases.
To a large extent the history of 2003 tax hikes resulting in more available money to spend, seems to have played a role in state government spending more. The same situation repeated itself with the tax increases of 2009 (except the authorized spending increases – presented publicly as “cuts”) are probably going to end up being real reductions because of the hole that has to be filled.
Government hasn’t gotten into the hole it has because taxpayers aren’t being taxed enough – the results show that we’ve got more taxes than can be paid already. Further increases or expansion of the tax burden won’t make what’s already too heavy any more affordable.
Some form of limits on government spending are essential, done either in the form of a restrictive system (like the Tax and Spending Control formula) or through the election of legislators who are more financially responsible than those who have been voting for the spending increases we’ve been getting.
Flexibility On How To Deal With Cuts Should Be Part Of Formula
By: Doug Busselman, Executive Vice President
One of the expected concepts that Governor Gibbons is anticipated to cover in his announcement of proposed, necessary reductions in educational spending (K-12 and Higher Education) is that those directly in charge should have the ability to make the cuts as they see fit. This is a good idea, allowing an approach of local determinations of where to cut and how best to handle the cuts. It not only empowers those who have the most insight on what works best for their circumstances…it also starts moving us away from the centrally-planned system of Nevada education which hasn’t been do so well in terms of delivering results.
No one is saying that making these reductions is going to be painless or popular, but those responsible for the direct operations of educational activities – whether at a local school district (perhaps even within a local school) – or at a particular institution of higher education – should have the flexibility to carry out the necessary actions. Through their actions, those who they serve will be able to see what are the priorities considered to be most important.
For those areas which don’t fit within the available resources, committed advocates can begin finding alternative ways to provide needed financial support – or come to recognize that the program they consider important isn’t sustainable as it currently is provided. Such a realization could transform our entire system into new directions not currently even under consideration.
Ideally, through the restraints of our ability to provide financial support an improved insight on what should be most critical (students learning) will be honed into a sharper perspective. Bureaucratic expanse of our educational systems could be replaced with a significant emphasis on focusing available resources into the actual delivery of education.
One of the expected concepts that Governor Gibbons is anticipated to cover in his announcement of proposed, necessary reductions in educational spending (K-12 and Higher Education) is that those directly in charge should have the ability to make the cuts as they see fit. This is a good idea, allowing an approach of local determinations of where to cut and how best to handle the cuts. It not only empowers those who have the most insight on what works best for their circumstances…it also starts moving us away from the centrally-planned system of Nevada education which hasn’t been do so well in terms of delivering results.
No one is saying that making these reductions is going to be painless or popular, but those responsible for the direct operations of educational activities – whether at a local school district (perhaps even within a local school) – or at a particular institution of higher education – should have the flexibility to carry out the necessary actions. Through their actions, those who they serve will be able to see what are the priorities considered to be most important.
For those areas which don’t fit within the available resources, committed advocates can begin finding alternative ways to provide needed financial support – or come to recognize that the program they consider important isn’t sustainable as it currently is provided. Such a realization could transform our entire system into new directions not currently even under consideration.
Ideally, through the restraints of our ability to provide financial support an improved insight on what should be most critical (students learning) will be honed into a sharper perspective. Bureaucratic expanse of our educational systems could be replaced with a significant emphasis on focusing available resources into the actual delivery of education.
Bad Science and Bad Politics
By: Doug Busselman, Executive Vice President
This past week I read the news blurb where President Obama was pushing the idea that the U.S. Senate should be getting on with the passage of the massive tax increase package known as Cap and Trade. The purpose of the tax scheme is government gaining even greater control of our economic future (taking the entire scope of our prosperity by the throat and choking capitalism out of our system).
In spite of the growing mountain of evidence which identify the degree to which the hoax of climate change has been shown to be – true believers and their political henchmen are scrambling to complete their mission of control are working feverishly to finalize their deals. Without big government’s heavy boot of control, green energy isn’t possible, because it can’t pencil without the artificial costs imposed through a carbon penalty.
There are those who make the argument that government forcing extra costs on us is only right, given the negative aspects of carbon-based energy sources. This of course is based on the foundation of the hoopla over the belief that man is causing the climate of the world to be altered.
Improvements that have been accomplished in reducing pollution impacts are not to be considered since that would suggest that the invented crisis can be resolved without the legislative solution to force greater government on us. This is on top of the other governmental burdens which have been responsible for driving the costs of energy to the levels which has already been imposed (preventing domestic exploration and development, prevention of infrastructure construction, keeping affordable energy like nuclear energy off the table…so on and so forth). The truth of the matter, government has already messed up the energy systems we require to have a healthy and vibrant economy.
The obvious connection of how bad science and bad politics are seeking to force us to our knees should be recognized. Imposing more government to further expand the constraints seems far from an ideal that we should willingly accept.
This past week I read the news blurb where President Obama was pushing the idea that the U.S. Senate should be getting on with the passage of the massive tax increase package known as Cap and Trade. The purpose of the tax scheme is government gaining even greater control of our economic future (taking the entire scope of our prosperity by the throat and choking capitalism out of our system).
In spite of the growing mountain of evidence which identify the degree to which the hoax of climate change has been shown to be – true believers and their political henchmen are scrambling to complete their mission of control are working feverishly to finalize their deals. Without big government’s heavy boot of control, green energy isn’t possible, because it can’t pencil without the artificial costs imposed through a carbon penalty.
There are those who make the argument that government forcing extra costs on us is only right, given the negative aspects of carbon-based energy sources. This of course is based on the foundation of the hoopla over the belief that man is causing the climate of the world to be altered.
Improvements that have been accomplished in reducing pollution impacts are not to be considered since that would suggest that the invented crisis can be resolved without the legislative solution to force greater government on us. This is on top of the other governmental burdens which have been responsible for driving the costs of energy to the levels which has already been imposed (preventing domestic exploration and development, prevention of infrastructure construction, keeping affordable energy like nuclear energy off the table…so on and so forth). The truth of the matter, government has already messed up the energy systems we require to have a healthy and vibrant economy.
The obvious connection of how bad science and bad politics are seeking to force us to our knees should be recognized. Imposing more government to further expand the constraints seems far from an ideal that we should willingly accept.
More Government Than We Can Afford
By: Doug Busselman, Executive Vice President
There are those who would like us to believe that the $900 Million hole in the state budget is a signal that we don’t have a broad enough tax base. They maintain that Nevada government should be in a position to spend at the required levels (which they determine to always need to be increasing) no matter what the condition of the economy. Unfortunately for Nevada taxpayers, those holding these strong convictions are the leaders of the majority party in charge of the legislative process.
Without a lot of sophisticated economic theory to back up the concept that I would like to advance here I’m going to try to make the case that having a $900 Million hole in the state budget is actually a signal that we’ve got about $900 Million more government than we can afford. It should be remembered that during the 2009 Nevada Legislative Session a two-thirds majority of lawmakers voted to increase state taxes by more than a Billion dollars. Those lawmakers took that action twice, since passage required an over-ride of Governor Gibbons’ veto. (Passage of the Billion tax increase was not an accidental slip-up – it was a planned and executed tax hike.)
The results of the tax hike and the “production” of the other taxes are not meeting the expectations for revenue generation. Although those who believe taxes can never be high enough – the inability to generate more revenue might be considered as a reality harkening to the attempts to get blood from a turnip analogy… Increasing the tax load to force even more underwater might not be a reasonable solution – no matter how much you want to believe that government deserves more money.
While there are those actively seeking to stick it to the mining industry by way of the tax overhaul that they would like to implement, dragging more sacrifices to be bleed at the sacred alter of bigger government is not an award winning formula for growing a sustainable economy. Even if a segment of the economy (whether individuals, companies, or grouping of industries) might be profitable, that does not entitle Nevada government the right of plunder in order to acquire greater revenue.
As difficult as this might seem to understand, the private sector does not exist to provide for government… Government should not exist to take from those who are deemed to be capable of providing in order for those who receive government funds to get more… (There is a form of government which operates on the mantra “From each according to his ability, to each according to his need” – but, we’re not quite there yet in completely adhering to Karl Marx’s philosophy.)
It would appear quite evident that a government which can’t meet the expenses that have been authorized – with the tax revenues which have been raised…but which are not currently yielding the level of income that provides for the expenses – should reduce the expenses to match the level of tax revenue being received.
There are those who would like us to believe that the $900 Million hole in the state budget is a signal that we don’t have a broad enough tax base. They maintain that Nevada government should be in a position to spend at the required levels (which they determine to always need to be increasing) no matter what the condition of the economy. Unfortunately for Nevada taxpayers, those holding these strong convictions are the leaders of the majority party in charge of the legislative process.
Without a lot of sophisticated economic theory to back up the concept that I would like to advance here I’m going to try to make the case that having a $900 Million hole in the state budget is actually a signal that we’ve got about $900 Million more government than we can afford. It should be remembered that during the 2009 Nevada Legislative Session a two-thirds majority of lawmakers voted to increase state taxes by more than a Billion dollars. Those lawmakers took that action twice, since passage required an over-ride of Governor Gibbons’ veto. (Passage of the Billion tax increase was not an accidental slip-up – it was a planned and executed tax hike.)
The results of the tax hike and the “production” of the other taxes are not meeting the expectations for revenue generation. Although those who believe taxes can never be high enough – the inability to generate more revenue might be considered as a reality harkening to the attempts to get blood from a turnip analogy… Increasing the tax load to force even more underwater might not be a reasonable solution – no matter how much you want to believe that government deserves more money.
While there are those actively seeking to stick it to the mining industry by way of the tax overhaul that they would like to implement, dragging more sacrifices to be bleed at the sacred alter of bigger government is not an award winning formula for growing a sustainable economy. Even if a segment of the economy (whether individuals, companies, or grouping of industries) might be profitable, that does not entitle Nevada government the right of plunder in order to acquire greater revenue.
As difficult as this might seem to understand, the private sector does not exist to provide for government… Government should not exist to take from those who are deemed to be capable of providing in order for those who receive government funds to get more… (There is a form of government which operates on the mantra “From each according to his ability, to each according to his need” – but, we’re not quite there yet in completely adhering to Karl Marx’s philosophy.)
It would appear quite evident that a government which can’t meet the expenses that have been authorized – with the tax revenues which have been raised…but which are not currently yielding the level of income that provides for the expenses – should reduce the expenses to match the level of tax revenue being received.
For Those Who Believe They Are Entitled
By: Doug Busselman, Executive Vice President
In spite of the hardships experienced by those in the private sector, dealing with the economic downturn, rising costs, business failures, high unemployment, increased tax burdens – the solution for the $900 Million shortfall in state budgets – at least in the minds of those who consider themselves above the rest of us…raise taxes some more. In spite of the extremely low performance of students in tests which measure what has been learned, these seem advocates can only focus on how they should be getting more funding.
Until the federal government started handing out more dollars for states which required some level of accountability, the Nevada educational establishment wasn’t interested in measurements linked to teacher performance. They even were able to team with their legislative allies in passing a state law that prohibited such accountability (oops! Now that has to be changed to get some of those federal dollars).
More money seems to be at the central core of all educational priorities – and who is it that we chastise for being greedy?
In this on-going series, which has been reporting on the e-mail campaign by University of Nevada, Las Vegas employees we see that those in the ranks of the state’s higher education system are also not of the opinion that reductions in their funding should be an option.
Reading between the lines in news accounts such as this there does seem to be some inclination on the part of at least one member of the Board of Regents to consider solutions for the system of higher education taking up their responsibilities to do what needs to be done. Regent Alden has been getting more recognition for his thinking on dealing with the challenges of not having all the money that University officials consider as being theirs.
It is somewhat interesting to note that a reduction of the size needed would be so much money…
Attempts to use the budget crisis as another excuse to increase taxes should be considered to be another example of how some people can’t get enough of other people’s money.
It is going to be an extremely difficult challenge to deal with the situation of the budget hole of state spending…working around those who consider themselves more entitled than others will not make the process any easier.
In spite of the hardships experienced by those in the private sector, dealing with the economic downturn, rising costs, business failures, high unemployment, increased tax burdens – the solution for the $900 Million shortfall in state budgets – at least in the minds of those who consider themselves above the rest of us…raise taxes some more. In spite of the extremely low performance of students in tests which measure what has been learned, these seem advocates can only focus on how they should be getting more funding.
Until the federal government started handing out more dollars for states which required some level of accountability, the Nevada educational establishment wasn’t interested in measurements linked to teacher performance. They even were able to team with their legislative allies in passing a state law that prohibited such accountability (oops! Now that has to be changed to get some of those federal dollars).
More money seems to be at the central core of all educational priorities – and who is it that we chastise for being greedy?
In this on-going series, which has been reporting on the e-mail campaign by University of Nevada, Las Vegas employees we see that those in the ranks of the state’s higher education system are also not of the opinion that reductions in their funding should be an option.
Reading between the lines in news accounts such as this there does seem to be some inclination on the part of at least one member of the Board of Regents to consider solutions for the system of higher education taking up their responsibilities to do what needs to be done. Regent Alden has been getting more recognition for his thinking on dealing with the challenges of not having all the money that University officials consider as being theirs.
It is somewhat interesting to note that a reduction of the size needed would be so much money…
“If higher education is forced to take a 22 percent cut, the seven-campus system would see a $37 million cut this year and $110 million next year, according to information provided by Klaich to the Board of Regents earlier this week.”…and this doesn’t even include the funding received from the other sources of revenue (such as the pipeline of dollars that Senator Harry Reid has provided for “research” projects to figure out how to get water away from private citizens who are using their water rights for agricultural production).
Attempts to use the budget crisis as another excuse to increase taxes should be considered to be another example of how some people can’t get enough of other people’s money.
It is going to be an extremely difficult challenge to deal with the situation of the budget hole of state spending…working around those who consider themselves more entitled than others will not make the process any easier.
Oh No You Don’t – Fee-Paid Reserve Accounts Off Limits
By: Doug Busselman, Executive Vice President
Earlier this week we heard the reports that in their effort to plug state budget holes that there was a possibility lawmakers would consider using reserve accounts, held in various state agencies as a funding source to avoid making some of the cuts in state spending. Based on this account by the Nevada News Bureau those rumors are still in play with legislators making it very public that they consider no reserve fund not being available for their use.
In spite of the spending binge that has driven the size of Nevada government to its current level, the members of the majority party don’t appear to be consigned to acceptance that their build-ups should be reduced to fit the ability of current revenue to meet the cost obligations.
For our part, the example that we are closely watching is the Nevada Brands Program. This service is funded by fees charged to livestock producers. As part of the funding process on a four-year rotation, re-recording fees are assessed and a large influx of funds occur, held in reserve for operational costs that take the reserves down over the time span to the next four year flush of new incoming cash. We are currently two years into the cycle and there is a cash balance of funds that seems to be tempting.
User fees, such as the brands reserve funds, have been paid by Nevadans for specific purposes – the delivery of the service they fund. If legislators are going to take those funds – because they appear to be unspent – the financial integrity of the program will possibly be in jeopardy. It should be noted that this situation is not just a matter of concern for the state brands inspection program…there are any number of similar funds in a number of state agencies in the same boat.
It is understandable that the approach of cutting important funding levels is going to impact Nevada citizens and layoffs of state employees is not going to be a pleasant thing to do. Layoffs in any employment situation is difficult. Doing what has to be done – has to be done and literally taking funds that aren’t yours to take to reduce the level of spending reductions that are required is not an acceptable choice for legislators to make.
We all need to be in touch with our representatives in the Nevada Legislature, encouraging them to move forward with the task of being fiscally responsible. Based on following the guidelines of priority requirements, anything not mandated by the constitution or courts should be considered as possible areas for funding reductions. If necessary entire program areas not falling into priority categories should be cut from general fund spending.
User fee reserve accounts should not be considered as funding sources. Those legislators who vote to raid reserve accounts will be identified and voters will be made aware of how they took these funds to avoid making the cuts which are required.
Earlier this week we heard the reports that in their effort to plug state budget holes that there was a possibility lawmakers would consider using reserve accounts, held in various state agencies as a funding source to avoid making some of the cuts in state spending. Based on this account by the Nevada News Bureau those rumors are still in play with legislators making it very public that they consider no reserve fund not being available for their use.
In spite of the spending binge that has driven the size of Nevada government to its current level, the members of the majority party don’t appear to be consigned to acceptance that their build-ups should be reduced to fit the ability of current revenue to meet the cost obligations.
For our part, the example that we are closely watching is the Nevada Brands Program. This service is funded by fees charged to livestock producers. As part of the funding process on a four-year rotation, re-recording fees are assessed and a large influx of funds occur, held in reserve for operational costs that take the reserves down over the time span to the next four year flush of new incoming cash. We are currently two years into the cycle and there is a cash balance of funds that seems to be tempting.
User fees, such as the brands reserve funds, have been paid by Nevadans for specific purposes – the delivery of the service they fund. If legislators are going to take those funds – because they appear to be unspent – the financial integrity of the program will possibly be in jeopardy. It should be noted that this situation is not just a matter of concern for the state brands inspection program…there are any number of similar funds in a number of state agencies in the same boat.
It is understandable that the approach of cutting important funding levels is going to impact Nevada citizens and layoffs of state employees is not going to be a pleasant thing to do. Layoffs in any employment situation is difficult. Doing what has to be done – has to be done and literally taking funds that aren’t yours to take to reduce the level of spending reductions that are required is not an acceptable choice for legislators to make.
We all need to be in touch with our representatives in the Nevada Legislature, encouraging them to move forward with the task of being fiscally responsible. Based on following the guidelines of priority requirements, anything not mandated by the constitution or courts should be considered as possible areas for funding reductions. If necessary entire program areas not falling into priority categories should be cut from general fund spending.
User fee reserve accounts should not be considered as funding sources. Those legislators who vote to raid reserve accounts will be identified and voters will be made aware of how they took these funds to avoid making the cuts which are required.
Cutting Nevada’s Spending
By: Doug Busselman, Executive Vice President
The Nevada budget is currently considered to have about a $900 million gap with more expenses than expected revenue. Because the state’s constitution does not allow for deficit spending (spending more than is available) corrections are required and will be dealt with in some fashion when the Nevada Legislature is called in for a special session.
Watching the Legislative Interim Finance Committee going through their meeting (Feb. 3, 2010) it’s hard to not see the majority party’s advocates positioning to shift the thinking to not want spending cuts as an alternative (especially in the area of reductions in state government employment). The dire consequences of layoffs of government employees and attempts to posture in order to draw attention to the “sacrifice” already made by public employees certainly didn’t suffer from any shortage of promotion.
There are on-going efforts to find ways of resolving the public policy differences between the Governor’s office and leaders of the Nevada Legislature. These considerations appear to be wide-ranging and comprehensive, leaving no stone unturned in the evaluation of what might pass as a consideration.
All agencies of the state have been and are going through significant assessment to determine their priority spending requirements. The Nevada Board of Regents are also engaged in their consideration for reductions of the Nevada Higher Education System’s budgets.
What comes forward from this analysis will need serious deliberation by not only legislators, but also citizens engaged in contact with their representatives, recognizing that there will be pain and distress in making the decisions which will be required. That isn’t to say however that going forward with responsible reductions is not an option.
Additional non-options include various account maneuverings that we are starting to hear about, as an example -- considering fee-payment accounts which have balances as potential targets for raiding. The Nevada Legislature has become quite brazen in their expansion of spending other people’s money to include diverting income from local governments or outright confiscation of resources that shouldn’t be theirs to acquire.
We understand that it is going to hurt and hurt very badly to make the necessary cuts in funds that have been allocated for expenditures which aren’t there for spending – seeking to avoid the responsibility is not going to be acceptable. We didn’t get into this situation because state spending wasn’t high enough and attempts to find a magic tax source which yields unlimited resources to provide for further expansion in spending are not going to bring us to a place where we need to be either…
As soon as the special session is commenced, legislators need to get on doing the things that need to done and bringing state spending to the level of the means available.
The Nevada budget is currently considered to have about a $900 million gap with more expenses than expected revenue. Because the state’s constitution does not allow for deficit spending (spending more than is available) corrections are required and will be dealt with in some fashion when the Nevada Legislature is called in for a special session.
Watching the Legislative Interim Finance Committee going through their meeting (Feb. 3, 2010) it’s hard to not see the majority party’s advocates positioning to shift the thinking to not want spending cuts as an alternative (especially in the area of reductions in state government employment). The dire consequences of layoffs of government employees and attempts to posture in order to draw attention to the “sacrifice” already made by public employees certainly didn’t suffer from any shortage of promotion.
There are on-going efforts to find ways of resolving the public policy differences between the Governor’s office and leaders of the Nevada Legislature. These considerations appear to be wide-ranging and comprehensive, leaving no stone unturned in the evaluation of what might pass as a consideration.
All agencies of the state have been and are going through significant assessment to determine their priority spending requirements. The Nevada Board of Regents are also engaged in their consideration for reductions of the Nevada Higher Education System’s budgets.
What comes forward from this analysis will need serious deliberation by not only legislators, but also citizens engaged in contact with their representatives, recognizing that there will be pain and distress in making the decisions which will be required. That isn’t to say however that going forward with responsible reductions is not an option.
Additional non-options include various account maneuverings that we are starting to hear about, as an example -- considering fee-payment accounts which have balances as potential targets for raiding. The Nevada Legislature has become quite brazen in their expansion of spending other people’s money to include diverting income from local governments or outright confiscation of resources that shouldn’t be theirs to acquire.
We understand that it is going to hurt and hurt very badly to make the necessary cuts in funds that have been allocated for expenditures which aren’t there for spending – seeking to avoid the responsibility is not going to be acceptable. We didn’t get into this situation because state spending wasn’t high enough and attempts to find a magic tax source which yields unlimited resources to provide for further expansion in spending are not going to bring us to a place where we need to be either…
As soon as the special session is commenced, legislators need to get on doing the things that need to done and bringing state spending to the level of the means available.
Farm Bill Spending
By: Doug Busselman, Executive Vice President
It is not an uncommon reaction, when suggesting that federal spending be reduced, to hear a retort which comments that the subsidies paid to farmers should also be cut. When considering the costs of federal government programs and the huge deficit that our elected leaders are deciding we should incur, cuts in all program areas have to be in the mix.
Under normal circumstances the idea is that only the big, rich, (decide whichever additional populists expressions you want to use in order to demean the chosen target) farmers should be impacted by the reductions in government payments. In some materials I've read their are those who say that the entire United States Department of Agriculture (USDA) should be abolished for cost saving and improved government reasons, but that type of a consideration doesn't seem to be a high enough priority for anyone to actually move it forward for action. If it were to be given attention there would be a host of additional government agencies that would also be on the lists for getting rid of as well...
For the sake of getting some type of understanding regarding the money spent under the legislative titles known as the Farm Bill, I offer this pictorial overview of the Breakdown of 2011 Outlays...
Thank you to the American Farm Bureau Federation for providing these additional specifics...
Discretionary spending for 2011 decreased from 2010 spending forcommodities, research, rural development, conservation and marketingaccounts. Discretionary spending for nutrition, forestry andadministration all increased from 2010 to 2011. These discretionaryincreases and decreases do not take into account changes proposed inmandatory spending programs such as the commodity safety net. USDA’sdiscretionary outlays are expected to decrease $1 billion from 2010 to2011, while mandatory outlays are expected to increase $5 billion.
It is not an uncommon reaction, when suggesting that federal spending be reduced, to hear a retort which comments that the subsidies paid to farmers should also be cut. When considering the costs of federal government programs and the huge deficit that our elected leaders are deciding we should incur, cuts in all program areas have to be in the mix.
Under normal circumstances the idea is that only the big, rich, (decide whichever additional populists expressions you want to use in order to demean the chosen target) farmers should be impacted by the reductions in government payments. In some materials I've read their are those who say that the entire United States Department of Agriculture (USDA) should be abolished for cost saving and improved government reasons, but that type of a consideration doesn't seem to be a high enough priority for anyone to actually move it forward for action. If it were to be given attention there would be a host of additional government agencies that would also be on the lists for getting rid of as well...
For the sake of getting some type of understanding regarding the money spent under the legislative titles known as the Farm Bill, I offer this pictorial overview of the Breakdown of 2011 Outlays...
Thank you to the American Farm Bureau Federation for providing these additional specifics...
Discretionary spending for 2011 decreased from 2010 spending forcommodities, research, rural development, conservation and marketingaccounts. Discretionary spending for nutrition, forestry andadministration all increased from 2010 to 2011. These discretionaryincreases and decreases do not take into account changes proposed inmandatory spending programs such as the commodity safety net. USDA’sdiscretionary outlays are expected to decrease $1 billion from 2010 to2011, while mandatory outlays are expected to increase $5 billion.
The USDA budget once again makes significant cutsto farm programs. Specifically, the proposal calls for $8 billion incuts to crop insurance over 10 years and reduces both payment limitsand adjusted gross income (AGI) limits. Direct payment limits arereduced from $40,000 to $30,000, and the adjusted gross income limitsfor both on-farm and off-farm incomes are decreased by $250,000 (to$250,000 off-farm and $500,000 on-farm). The payment limit andadjusted gross income cap reductions save $2.3 billion over 10 years.
Thepayment limit and AGI limit changes would require re-opening the 2008farm bill. Farm Bureau strongly opposes re-opening the farm bill, andSenate Ag Committee Chairman Blanche Lincoln (D-Ark.) and House AgCommittee Chairman Collin Peterson (D-Minn.) have both alreadyexpressed their unwillingness to re-open the farm bill.
Thebig winner in the USDA budget was once again nutrition, with a $10billion increase in spending for nutrition programs to improve programaccess, establish higher standards for the nutritional quality of foodsavailable in schools, and explore new strategies for reducing hunger.
Other Highlights Include:
- $54 million in additional discretionary funding for export promotion programs supported by Farm Bureau.
- An increase in funding for EQIP over last year’s enacted levels of spending, but USDA proposes spending $380 million less than the maximum amount permitted under the 2008 farm bill.
- User fees to fund food safety inspections. Farm Bureau opposes these user fees.
- Reduces funding for farm lending programs. Farm Bureau is extremely concerned about these cuts during a time of tightening credit and falling farm incomes.
- $95.3 million to upgrade computer systems for FSA. Farm Bureau supports upgrading these outdated computer systems to provide better service to farmers and ranchers.
- $429 million in competitive grant funding for research focused on climate change, bioenergy, childhood obesity, world hunger, and food safety. While Farm Bureau strongly supports research funding for agriculture, we are concerned that production agriculture is not clearly defined as a priority, while political issues such as climate change are a key areas of focus.
- Fully funds the Voluntary Public Access and Habitat Incentive Program (“Open Fields”) at $50 million, which encourages private landowners to voluntarily open their land to the public for hunting and fishing. Farm Bureau has concerns with this program due to liability issues.
- $479 million to fund the Biomass Crop Assistance Program and $15 million for the Forest Biomass for Energy Program. Farm Bureau supports these efforts as well as research and development efforts for all forms of renewable energy.
Doing What’s Being Done Isn’t Working – So Why Keep Doing More Of The Same?
By: Doug Busselman, Executive Vice President
This news flash that the U.S. Senate is working to put together another job’s bill left me shaking my head over the way in which we’re going to change things for the better even though what’s being done keeps making things worse… I suppose it comes down to those with the votes not being willing to accept the concept that government can’t spend us into anything more than an extremely large hole.
On the state level, the situation is basically the same (except not having the ability to spend money that isn’t actually there). Again, as Geoffrey Lawrence points out here, the way we got into this mess is legislators voting to increase spending in good times as well as bad. The more money they had to spend…the more they spent. When they didn’t have the dollars to increase spending…they increased taxes and kept right on spending. Now there is a $900 Million hole that needs to be dealt with and there’s not any easy places to rob as was done the last couple of times when lawmakers needed some extra spending money.
Are cuts going to be easy or pleasant – NO, They are not. It is going to hurt and might keep hurting for a while.
Should tax increases be considered to fill the holes? NO! Those who keep spending don’t deserve the trust that they won’t spend whatever they get and then some…
We can’t keep giving the same people the opportunity to keep doing what they have been doing and expect a different outcome – Those who have been taxing and spending us into the situation we’re in need to be shown the door and those will a game plan for reduced government and increased emphasis on fiscal responsibility need to be brought in to clean up the mess.
This news flash that the U.S. Senate is working to put together another job’s bill left me shaking my head over the way in which we’re going to change things for the better even though what’s being done keeps making things worse… I suppose it comes down to those with the votes not being willing to accept the concept that government can’t spend us into anything more than an extremely large hole.
On the state level, the situation is basically the same (except not having the ability to spend money that isn’t actually there). Again, as Geoffrey Lawrence points out here, the way we got into this mess is legislators voting to increase spending in good times as well as bad. The more money they had to spend…the more they spent. When they didn’t have the dollars to increase spending…they increased taxes and kept right on spending. Now there is a $900 Million hole that needs to be dealt with and there’s not any easy places to rob as was done the last couple of times when lawmakers needed some extra spending money.
Are cuts going to be easy or pleasant – NO, They are not. It is going to hurt and might keep hurting for a while.
Should tax increases be considered to fill the holes? NO! Those who keep spending don’t deserve the trust that they won’t spend whatever they get and then some…
We can’t keep giving the same people the opportunity to keep doing what they have been doing and expect a different outcome – Those who have been taxing and spending us into the situation we’re in need to be shown the door and those will a game plan for reduced government and increased emphasis on fiscal responsibility need to be brought in to clean up the mess.
Finding Our Way Back To The Market
By: Doug Busselman, Executive Vice President
After reviewing a few of the news articles that have been written to try and detail the $3.8 TRILLION budget proposal that the Obama Administration released yesterday, my thinking is rushing in all different directions. Perhaps the most telling theme of the $3.8 TRILLION budget is that it is still headed in directions which aren’t good directions to be going in…and I’m not just talking about the deeper financial abyss than we’re already in.
It’s because of this expansion of government into the areas that our current leaders are taking us that U.S. agriculture needs to stop counting on the federal dollars which have become part of our profit and loss sheets and get into a mindset that our best hope must be found in the marketplace. As advanced by the American Farm Bureau Federation in their urging for attention to critical trade agreements the focus must be to pursue every opportunity out there for sales and revenues that can result from non-governmental avenues.
Those who rely on government for their support are going to find themselves wishing that they would not be in that boat. Strengthening self-reliance may not be the approach where the rest of society seems to believe it should go, but agricultural producers and other business ventures who are intending on long-term sustainability need to expand their capabilities to operate within the market system.
Perhaps most frightening of all when you look over the “highlights” of the $3.8 TRILLION budget proposal is the realization that it is only a proposal. Congress takes it from here and experience has taught that those who run things in that body are not going to make that proposal smaller.
There isn’t going to be an easy way out of this mess – so finding a way to stop depending on those who can’t be relied on is a critical step for all of us to take.
After reviewing a few of the news articles that have been written to try and detail the $3.8 TRILLION budget proposal that the Obama Administration released yesterday, my thinking is rushing in all different directions. Perhaps the most telling theme of the $3.8 TRILLION budget is that it is still headed in directions which aren’t good directions to be going in…and I’m not just talking about the deeper financial abyss than we’re already in.
It’s because of this expansion of government into the areas that our current leaders are taking us that U.S. agriculture needs to stop counting on the federal dollars which have become part of our profit and loss sheets and get into a mindset that our best hope must be found in the marketplace. As advanced by the American Farm Bureau Federation in their urging for attention to critical trade agreements the focus must be to pursue every opportunity out there for sales and revenues that can result from non-governmental avenues.
Those who rely on government for their support are going to find themselves wishing that they would not be in that boat. Strengthening self-reliance may not be the approach where the rest of society seems to believe it should go, but agricultural producers and other business ventures who are intending on long-term sustainability need to expand their capabilities to operate within the market system.
Perhaps most frightening of all when you look over the “highlights” of the $3.8 TRILLION budget proposal is the realization that it is only a proposal. Congress takes it from here and experience has taught that those who run things in that body are not going to make that proposal smaller.
There isn’t going to be an easy way out of this mess – so finding a way to stop depending on those who can’t be relied on is a critical step for all of us to take.