Understanding Government

In an illuminating (and surprisingly snark-free) column, Gerald Seib of the Wall Street Journal explains why a budget/debt-ceiling agreement would be good for Obama and good for Washington.  Seib points out that there are at least two statesmen in Washington:

. . . [B]oth Messrs. Obama and Boehner have been searching for a big deficit deal for the most imporant reason of all:  Both think one would be good for the country and its economy in the long run.  Both deserve credit for that.

Seib then explains why an agreement would be good for Obama and why, in the end, Obama could come out the winner in any case — politically, at least: (more…)

When not searching the couch cushions and glove compartment for loose change, Illinois Gov. Pat Quinn tends to make controversial proposals to ensure his state pays overdue Medicaid bills — and therefore keeps getting millions in federal Medicaid funds. First, Quinn wanted the state to borrow $8.75 billion, but the state legislature was cool to the idea. Now, the Springfield State Journal Register’s Dean Olsen reports that Quinn wants the Illinois Finance Authority to borrow $750 million from private investors like banks and then repay the banks with interest.

Given the state’s massive short and long-term deficit, further borrowing sounds bad. But other alternative to make state payments are worse: like freezing state income tax money that goes to municipal governments (many of which, like Chicago, are doing just as badly as the state).

Has the state of Illinois — where the last two governors were federally indicted — become more responsible than the federal government? Rick Pearson and Monique Garcia of the Chicago Tribune have the rundown of a historic evening last night as a 67 percent income tax increase and 46 business percent business tax increase passed the Illinois House 60-57 and Illinois Senate 30-29. (more…)

Pat Quinn

The Illinois budget deficit is projected to reach $15 billion this summer — or more than half of the state’s annual budget. Monique Garcia of the Chicago Tribune reports that Illinois Gov. Pat Quinn has stumbled upon a novel if not innovative solution to this problem: Let’s borrow the entire $15 billion by issuing a “debt bond.” Quinn figures it will actually cost less for Illinois taxpayers to repay the interest on a massive loan than the status quo of paying penalties to Illinois social service providers who, thanks to the budget deficit, aren’t getting paid on time.

And it’s not like there are more appealing options than the loan to end all state government loans. (more…)

Last week I blogged that Illinois Gov. Pat Quinn, a Democrat, decided to spend $47 million to extend Put Illinois to Work, which originally started as a federal stimulus bill jobs program but is now being paid for entirely by the state. Civics 101 students may have wondered how the governor can decide to spend money without the state legislature’s approval. The Chicago Tribune’s Monique Garcia reports that the GOP leader in the Illinois Senate, Christine Radogno, is wondering the same thing — Radogno sent a letter to Quinn Friday questioning both the effectiveness of Put Illinois to Work and whether Quinn could legally extend the program.

The conflict centers around two of the biggest problems in Illinois — high unemployment and a state government that has avoided confronting a historic $15 billion or so budget deficit. (more…)