MacIver News Service | April 12, 2019
Happy Friday! This week the Joint Finance Committee continued its listening sessions in Oak Creek. The MacIver Institute was there and provided live coverage of it. To keep up-to-date on all the happenings, be sure to follow us on Twitter. It’s Masters Weekend, so while you wait for Tiger Woods to tee off, here are a few important articles for the fiscal conservative, in case you missed it.
Last week, a handful of Wisconsin agencies provided briefings on the 2019-21 Budget before the Joint Finance Committee. The Department of Public Instruction focused their briefing on the school choice program in Wisconsin, as well as increasing spending on education. The Department of Transportation advocated for spending increases on road construction projects. The Department of Health Services advocated for Wisconsin to accept federal Medicaid expansion funding and discussed the future of Wisconsin healthcare in the post-Obamacare world.
The United States’ deficit is rising at a faster pace than previously estimated. Six months into the fiscal year, the deficit is a staggering $691.2 billion. The deficit during the same period last fiscal year was $599.7 billion. If the deficit continues to grow at the current rate, it will exceed projections and run to nearly $1.4 trillion. The Government Accountability Office says the growth is “unsustainable” and “the longer action is delayed, the greater and more drastic the changes will be”.
The proposed rollback of former Governor Scott Walker’s manufacturing and agriculture tax credit has some manufacturers considering their future plans. The tax credit has allowed companies to increase their payrolls, and one company in particular, Prent Inc., has doubled its payroll since the tax credit went into effect. States such as Illinois, which have high taxes and more regulatory burdens, have lost a considerable number of manufacturing jobs since the Great Recession. Some are worried Wisconsin could be the next state to suffer this fate if the tax credit for manufacturers is limited.
An analysis of a proposed family leave bill introduced by Senator Marco Rubio (R-FL) claims it would not harm Social Security’s finances if enacted. The New Parents Act would allow parents to take Social Security payments in exchange for a delayed retirement, or reduced payments. The Social Security Trust fund is expected to run out of money by 2034, at which point new parents would receive less. This study operates under the assumption only 40 percent of new parents will take leave, and will only take 2.5 months of leave per child.
A look back at the Federal Reserve’s policy since the financial crisis of 2009 has shown that Americans have lost over $500 billion in interest payments due to low interest rates. These trends are expected to continue, as the Federal Reserve indicates that it is unlikely to raise rates for the remainder of the year because of concerns of slowing growth. Rates are expected to remain low for some time given President Trump’s animosity to high rates, as well as the nominations of Herman Cain and Stephen Moore to the Fed Board.