If we as a nation want to know what it will take to get back on track, we need look no further than what Republican Governors are doing throughout the country. The principles they are following are the key to our salvation and lead down the exact opposite road Barack Obama and the Democrats want to take to go “FORWARD.”
Bob McDonnell, Chairman of the Republican Governors Association, is a case study in the laser beam focus on two main principles that GOP chief executives are following: 1) balance the budget by cutting spending, and 2) do not raise taxes. McDonnell ran for office in 2009 during the first year of the Obama Administration seeking to succeed Governor Tim Kaine, then serving as Chairman of the Democratic National Committee. In a harbinger of voter disapproval of Democratic policies taking place nationwide (as evidenced in the midterms the following year), McDonnell won his election in a 17-point landslide, though Obama won the state by 6 points in 2008—a 23 point swing.
McDonnell then proceeded to do just what he said he would. While President Obama and the Democrats were passing the $800 billion Stimulus Bill, pushing through the brand new Obamacare entitlement, adding 100,000 new employees to the already bloated 2.8 million federal government worker rolls, and racking up a record $1.5 trillion deficits, Virginia was making the tough choices, slashing spending and balancing its budget. The results speak for themselves. Unemployment in the Dominion State has dropped to 5.6%, two and half points below the national average, and Virginia ranks number three in CNBC's rankings of the top states to do business. It should be noted that eight of the top ten best states to do business are run by Republican Governors.
GOP Governors around the nation have stepped up and have been making the tough calls with a fierce determination to get their states back on a healthy fiscal footing. It’s meant taking on some of the most powerful interests in their states. Of course Scott Walker in Wisconsin is a Profile in Courage in this regard in his stand against government employee unions. Other first term Republican Governors like Chris Christie in New Jersey, John Kasich in Ohio, and Nikki Haley in South Carolina are living up to their campaign pledges, taking on the special interests and balancing their budgets, by cutting spending and not raising taxes.
One need look no further than Democratically controlled California to find a state where the opposite is true. The unemployment rate in the once Golden State remains at a staggering 12%. The State budget is hamstrung by the unsustainable pay and benefits packages lawmakers have given to its government workers as pay back for union support during past elections. California government employees are the highest paid in the nation, surpassed only by those in the District of Columbia (surprise, surprise).
For decades, California raised taxes on the “wealthy” to pay for its government employee benefits and its generous social services (one-third of the nation’s welfare recipients live in the state, though it has only 12% of the population) failing to see it was killing the goose that lays the golden egg. As a result, there has been a net outflow of over 1 million people during the last decade. The State faces a massive budget shortfall of $16 billion and has seen its credit rating drop to junk bond status.
To address its budget shortfall, Governor Jerry Brown has placed an initiative on this fall’s ballot to raise taxes on those earning over $250,000 (who already pay the second highest state income tax rate in the nation) and raise the sales tax still further above its’ current 11.8% average. Not surprisingly, California has been rated the worst state in which to do business. In the CNBC ranking, seven of the ten worst states to do business in are run by Democratic Governors.
The scary truth is the same policies that have brought California, which alone represents the eighth largest economy in the world, to its knees Barack Obama is committed to continuing to implement at the federal level. While the Republican Governors credo has been cut and balance; Obama remains tax and spend. The National Debt will surpass $16 trillion by the end of the year as the federal government spends $3.7 trillion in FY 2012, up from $2.9 trillion under Bush in FY 2008. For the first time in American history, our credit rating was downgraded, because of the massive spending and the accompanying lack of faith in Washington’s ability to address the matter.
President Obama’s plan of raising taxes on those earning over $250,000 (from a 35% to 40% top marginal rate) may add another $40 billion a year in revenues, but that barely makes a dent in the $1.5 trillion deficit. In other words, the President has no plan. Even if we took 100% of the wealthy’s income (since they didn’t really earn it anyway, according to the President), the federal government would still face annual deficits of over a half a trillion dollars. Of course such a policy would also cause some problems in creating wealth and jobs going forward.
There is hope. As at the state level, the Republicans have a viable plan with the Ryan Budget, which passed the House and Mitt Romney supports. It follows the basic principles being implemented by Republican Governors around the nation: cut spending and do not raise taxes.
The true way “FORWARD” could not be clearer.
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