Thursday, August 19, 2010

Mandates and Blackmail
  Progressivism piece by Thomas D. Segel

Harlingen, Texas, August 19, 2010:  According to an email from my brother, Nate, who calls California home, his state is really in bad shape.  Since politicians are notoriously poor at math, they can only estimate the state is in debt between 19 and 21 billion dollars.  The state, counties and cities are either passing out pink slips to people or making them take days off work without pay.  Schools are terminating the employment of teachers and staff.  Those educators still employed are also targeted. Some school districts are requiring the working teachers to take reductions in their wages just to retain their positions.  Colleges and universities are cutting their staff, limiting enrollment and reducing the number of classes being offered. Plants are closing or relocating.  The value of housing has dropped up to 50% in some locales.  While this is taking place the prices on everything from utilities to gasoline keep climbing. Unemployment continues at 12.5%.

On the local Texas scene, Minerva Simpson, an independent mortgage broker, sees real estate in the Rio Grande Valley taking more financial hits.  In areas around McAllen there has been a 15 to 20K drop in home values.  She forecasts an expanding number of foreclosures due to the failure of banks to embrace the federal government’s loan modification plan. They have seen the reality that the program is only a Band-Aid for the mortgage problem. Among those banks that do embrace the easier mortgage modifications,  those in the business observe another problem. Some banks are advising people to “become past due” on their mortgages so they can qualify for the modification of loan program.  Though the statewide unemployment rate is well below the national average at 8%, people still continue to lose jobs.

From a debt-infected California across the country to the Lone Star State, only modestly hit by the economic woes of the nation, states are in serious trouble.  The federal government adds to local woes by attempting to bend sovereign states to the national will using unfunded mandates and financial blackmail as its weapons.

Unfunded mandates have been a weapon of choice by Washington for years.  We have all experienced the requirements of car seats, safety chairs for children, seat belts, no-lead paint, those new pig tail light bulbs, warning labels on almost every item purchased, a vast assortment of safety inspections, boiler inspections, air tank inspections, underground tank inspections and fire sprinkler tests.  We know about the multitude of requirements placed on school districts, ranging from bus safety to charter schools.  We have seen the requirements levied on states before they can obtain federal education grant dollars.  There are even federal mandates on school curriculum.

Now that the government has become a partner in the financial world, there are new rules and instructions for banks to follow.  This includes increased fees and penalties.  The same thing is true for mortgages, with additional government requirements for higher processing fees and increased costs on purchasing a home.

Having used your dollars to bail out the auto industry, our government now tells the manufacturers what cars to build and which they want off the road.  More money has been diverted from the food stamp program to fund teacher retirements and saved jobs.

None of these programs or government support projects come free of state commitment.  Historically the federal government has done two things that have been an invasion of state rights.  They have created legislation or regulation that placed the burden of funding their new requirements directly on the shoulders of state or local governments, or directly upon the citizens.

In many cases, when federal mandates are funded at a national level, additional requirements are placed on the states before they can accept the new dollars.  The recent extension of unemployment insurance could only be accepted by the states, if they agreed to rules that would permanently extend those same benefits…even after the extra federal dollars had been exhausted.

For Texas, a special requirement was placed in the legislation by Congressman Lloyd Doggett (D) that before the money to save teacher jobs would be given to the state, Governor Rick Parry had to assure the funding would be used for stated purposes up until 2014.  This was done, as was the case with former stimulus monies, knowing the governor has no authority to approve or authorize any expenditures for longer than two years.  In truth, the Democrat controlled government was denying funds to Texas and presenting it as rejection of the money by a Republican governor.

But, this is the history of our federal government.  For decades, regardless of which political party was in power at the time, Washington has passed law after law and ruling after ruling that mandated the fifty states to take action…and usually fund another Washington whim.  When what was proposed was not accepted, there usually followed the threat of withhold road construction funds, health related funds, education funds…and these days border security funds.  With Washington it is always a case of either unfunded mandates or financial blackmail.

Semper Fidelis

Thomas D. Segel
http://thomasdsegel.com/

Posted by Thomas D. Segel on 8/19/10

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