It’s Time for Taxpayers to Remind Congress It’s Not Their Money

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By Andrew Wilford for RealClearMarkets

In just about four months, President Biden has proposed or signed into law around $6.5 trillion in new spending. With your taxpayer dollars suddenly up for grabs, a lot of bad ideas have been coming out of the woodwork.

As I wrote several times both before and right after the passage of the American Rescue Plan Act (ARP), the calls for massive amounts of state and local aid were not justified by the underlying data on state fiscal situations.

Though states went from anticipating revenue drops of 8 percent to realizing revenue decreases of a far more manageable 0.4 percent, the insistent calls for massive federal aid never changed.

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As a result, ARP included $350 billion for state and local governments, including just under $200 billion for states alone.

The level of aid was so excessive that a provision was inserted into the ARPA that barred states from using federal aid dollars to fund tax cuts — the kind of thing that generally isn’t necessary if states desperately needed the cash to fund their existing services.

Now, California, a state that once claimed it was on track for a $54.3 billion budget shortfall, is now sitting comfortably on a $76 billion surplus. The state’s fiscal situation is so rosy that its embattled governor Gavin Newsom is proposing $600 tax rebate checks to each Californian.

Even though California has so much money sitting around it’s actually giving some back to its citizens, the Golden State will still receive $27 billion in aid from ARP. Phew, good thing Uncle Sam is borrowing those tens of billions of dollars to bail California out!

And the Congressional gravy train doesn’t stop there. Biden’s proposal for a $2 trillion infrastructure package has every out-there infrastructure project proposal believing this could be its year.

Though I risk causing grave offense to the Train People on Twitter for saying so, not every rail project deserves to go forward. Take two proposals for east coast high-speed rail hoping for federal funding.

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One such proposal would create a high-speed rail line between D.C. and Baltimore, a stretch that takes about an hour to travel by car or by MARC commuter train, or half an hour by Amtrak train.

At a cost of between $13.8 billion and $16.8 billion, the new high-speed rail line would be able to traverse this distance in 15 minutes.

Shorter commute times are always nice, but the average commuter would still probably choose to pay the $8 fare for a MARC train over the $60 expected fare for the high-speed rail line.

The price tag simply isn’t justified by the benefit of shortening an already-short trip — unless, of course, the federal government is going to cover part of the bill.

Another exorbitantly expensive high-speed rail proposal aims to create a rail line between Long Island, New York City and Boston. Anyone who has ever had to travel on I-95 knows that would be convenient, but the construction cost is estimated to be over $100 billion and would take two decades to complete (so you can probably bet it would cost more and take longer even than that).

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That absurd price tag and timeline isn’t stopping regional lawmakers from trying to get the project added to the menu. Northeast lawmakers have already begun lining up behind including the rail line in an upcoming infrastructure bill.

President Biden’s unceasing drumbeat of new tax and spending proposals have probably made most taxpayers’ eyes glaze over at the sheer scope of spending being proposed, but that doesn’t mean the federal government is suddenly an endless stream of funding for every fantastical idea.

Taxpayers should remind Congress that they expect the federal government to be responsible custodians of their hard-earned tax dollars, not throw it around at every shiny object that catches their eye.

Syndicated with permission from RealClearWire.

Andrew Wilford is a policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to tax policy research and education at all levels of government. 

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