While the governor’s recent proposals to solve the looming $6 billion state budget deficit do not include any tax increases, as he promised, his plan comes up short on lasting solutions. The governor’s plan relies on one-time (and indeterminate) bailout money from the federal government, borrowing and tapping the cash reserves of the Health Care Access fund. These are all stopgap measures that may or may not help solve the current biennium’s budget woes, but do nothing to provide needed long-term stability in the state's finances.

While the governor’s plan relies heavily on these one-time stopgap solutions, there are some spending reductions in the package. The governor has proposed approximately $2.3 billion in spending cuts. All major areas of the state budget are slated to be scaled back except the two largest budget items, K-12 education and Health & Human Services. Those two items combined make up almost 70% of the general fund budget and the governor proposes increased spending in each. K-12 education is slated for a funding boost above and beyond the current budget plan. Governor Pawlenty proposes a permanent per-pupil formula increase of $300 or 5% to get districts not utilizing his performance pay plan, “Q Comp,” on board with that program. He’d also like to give high-performing districts a 2% bump in the general education funding formula. Health & Human Services would get a 9.6% increase over the current biennium.

$287 million in tax cuts are also included in the governor’s plan, with the objective of creating and preserving jobs. He proposed a reduction in the state’s highest corporate tax rate, providing an up front sales tax exemption for new business equipment purchases and accelerated write-off of the depreciation tax deduction on such equipment. These seem like good ideas to try to stave off or reduce the impact of rising unemployment (presently projected to exceed 10% by the end of the year).

There are some positive aspects of the governor’s budget proposals, but the overall plan misses an opportunity to examine the entire state budget situation and make permanent reforms to create a common sense and sustainable budget that wouldn’t go out of whack every other biennium. It’s a temporary political move designed to, as much as possible, maintain the status quo without hiking taxes. Even if all the what-ifs fall in to place and the current budget crisis is dealt with by these proposals, the same ugly problem will resurface in the 2012-2013 biennium. In that respect, the governor’s critics are justified in accusations of band-aid solutions and budgetary gimmicks.

It’s past time Minnesota face reality and wrestle with our out of control spending problem. Budget increases are on auto-pilot, and growing at a rate that far outpaces normal inflation. The present course is unsustainable. The sooner we can change the budget’s tack, the better.

Take Action: Submit your budget-balancing ideas and comments at MinnesotaBudgetSolutions.com.

Additional Resources

• Click here to listen to former state audior, Pat Anderson discuss the budget situation on the Dan Conry Show (MP3).
• Press Release: Governor Pawlenty Presents Balanced Budget that sets Priorities and Positions Minnesota for Success.

Several House lawmakers gathered for a press conference on Monday to introduce HF 57, a new bill that will require Minnesota voters to provide picture identification before receiving a ballot. Representatives Tom Emmer, Paul Kohls, Dan Severson and Mary Kiffmeyer authored the bill.

The bill also includes provisional ballots for those who may have forgotten their ID, or need more time to obtain proper identification and a clause that will provide free ID for voters who do not have and can’t afford state-issued Identification.

This bill is one great step towards improving confidence in the integrity of Minnesota’s elections. A recent survey found that 85% of Minnesotans favor the photo ID requirement that will be established by this legislation. Dozens of supporters turned out with signs advocating election reform and packed the House Press Conference Room.

The bill will be heard first in the House State and Local Government Operations, Reform, Technology and Elections Committee.

Take Action: Three Ways to Get Involved

• Sign the Election Integrity Petition and tell your legislators to support voter Photo ID.
• Write a letter to the editor in support of voter photo ID.
• Click here to contribute to Minnesota Majority and help advance election integrity.

Additional Resources: Click here to listen to the podcast of Rep. Mary Kiffmeyer discussing the voter ID bill on the Dan Conry show.

A group of non-partisan, non-profit organizations have formed a coalition that will be gathering suggestions to solve Minnesota’s current $4.8 billion shortfall.  The coalition is seeking methods that can solve the states budget problems without adding to the tax burden of families and small businesses.

The coalition is asking for proposals from policy experts and ordinary citizens in order to begin a constructive dialogue for real budget solutions.  A new website has been launched at MinnesotaBudgetSolutions.com where anyone can help identify opportunities to restructure state spending and comment on budget proposals. 

"The partners in this coalition range include members of the construction industry to family advocacy groups," said Pat Anderson, President of the Free Market Institute.  "Our goal is to make sure that during the state budget process that the day to day challenges of average families are considered when proposed tax increases and spending reductions are offered up."

Members of the coalition include; Associated Builders and Contractors, Minnesota Family Council, Minnesota Free Market Institute, Minnesota Majority, the Minnesota chapter of the National Federation of Independent Businesses, Taxpayers League of Minnesota, and Campaign for Liberty.

"Our object is to understand and develop opportunities to better allocate state funds, and then seek common sense solutions that won’t add to the burden Minnesota families already bear," said Jeff Davis, President of Minnesota Majority.  "Minnesota is home to some of the best and brightest individuals.  If we roll up our sleeves and work together, we can accomplish this goal."

Take Action: Visit MinnesotaBudgetSolutions.com to add your ideas about how to balance the state's budget.

Common Sense Radio returns to Minnesota's airwaves on Monday, January 19th. Dan Conry's new syndicated show will be broadcast live weekday mornings from 7:00 to 9:20 on KRWC, Radio for Wright County AM 1360.

Conry's new program based on common-sense conservatism and having a good time while discussing the issues of the day will be streamed live on the internet and podcast from DanConry.com.

Raised in Flatbush Brooklyn in what he calls his crazy Irish family, Dan developed his street smarts & well known self deprecating sense of humor on the streets of New York. Dan joined the NYPD in the 1980s. After several years as a street cop in Brooklyn, he became an undercover narcotics Detective in Manhattan. Dan retired from the NYPD and moved to Minnesota after an injury in the line of duty.

Dan says he's bringing some familiar characters to the new program. Super Dave Harrigan will produce the show and Bill Snyder will be sitting in from time to time.

Minnesota Majority is happy to have Dan as a new neighbor in the bunker. The Dan Conry Show will be broadcast from the brand new Minnesota Majority studio. Don't miss it!

Take Action: Tune in to Dan Conry Monday, January 19th from 7:00 to 9:20 AM.

The term "Ponzi Scheme" has come up in the news a lot lately, primarily in describing $50 billion in investment securities fraud Bernard Madoff is accused of perpetrating. Not often explained is what a Ponzi Scheme is, and how it works.

Named for Charles Ponzi, an Italian immigrant and con man around the turn of the 20th Century, the con is sometimes also referred to as a "pyramid scheme" wherein early investors are paid from the deposits of a widening base of new investors. As long as new people continue to buy into a growing ponzi scheme, money continues to flow upward to the pyramid of investors. These schemes inevitably collapse when the pool of new investors pumping new money in can’t grow fast enough to support the payments to earlier investors, because actual investment earnings, if any, are not sufficient to cover promised returns.

Even though Ponzi schemes always collapse, getting in early ("on the ground floor") can yield tremendous returns. It’s the people who come in towards the end of the scheme that lose big, since their money hasn’t actually been invested, but merely passed up to the personal accounts of the creator of the scheme and earlier investors.

One year after Charles Ponzi was released from prison for fleecing unsuspecting investors out of $7 million, President Franklin D. Roosevelt concluded that the federal government could get away with such a scheme. Social Security was signed into law as part of the "New Deal" in 1935.

Social Security is now the largest government enterprise in the entire world and combined with Medicare/Medicaid accounts for over 40% of all U. S. federal government spending.

Social Security is a mandatory retirement investment, deducted each pay period from every employee’s wages, with the promise that these investments will be repaid with interest by the federal government upon retirement, but like most Ponzi Schemes, the money isn’t actually invested in any conventional sense. In fact, current social security deposits are not only used to cover current transfers to retirees, but also part of the federal deficit. The government can get away with this for the time being because Social Security deposits are currently in excess of payments, but the number of retirees is now growing faster than the workforce. Unless changes are made in the way Social Security functions, it will collapse like all Ponzi Schemes do, when the pool of new investors isn’t contributing enough money to support payments promised to beneficiaries further up the pyramid. Eventually, a whole generation of investors into this scheme is going to get burned. Since the largest generation, the "baby boomers" are beginning to retire, with a smaller generation coming up to support them, that day of reckoning is likely coming sooner rather than later.

Over objections of the Senate and the majority of American citizens, President Bush facilitated a $17.4 billion loan of taxpayer’s money to Detroit’s troubled automakers today. Since Congress did not approve new funding for the automakers’ bailout, the president tapped the TARP (Troubled Asset Relief Program) fund for $13.4 billion of the loan. The remaining $4 billion will still require legislative approval. Ford says it doesn’t need the loan, so GM and Chrysler will apparently split the take. To put the amount in perspective, the state of Minnesota collects about $17 billion per year from all tax and fee revenue sources. Enough tax money to run the entire state of Minnesota for a year is being doled out to two private companies that are unable to stand on their own feet. With these companies teeting on the edge of the abyss, it's entirely possible that these loans will never be repaid.

TARP was established to bailout Wall Street. A $700 billion fund of non-existent money was established to prop up failing financial corporations. Initially the president signaled that he opposed using this fund to bailout the car manufacturers. Following the defeat of the bailout bill in the Senate, the president has changed his tune, saying, "The only way to avoid a collapse of the American auto industry is for the executive branch to step in. My economic advisers believe that such a collapse would deal an unacceptable blow to hardworking Americans far beyond the auto industry."

The bailout "loan" comes with strings attached. Primarily, that the loan will be recalled if the automakers aren’t "viable" by March 31st. In essence, the president has said that the car manufacturers can not be allowed to fail, for dire consequences will ensue – unless they are still foundering this spring, in which case, it’s evidently OK to allow the collapse and ensuing economic Armageddon. Makes perfect sense.

The auto bailout is just the latest in a seemingly endless parade of corporate handouts, taking money from the pockets of hard working men and women, their children and their children’s children to cover the bad decisions of millionaires and billionaires. Current federal bailout commitments total $8.7 trillion. The entire federal budget is $3 trillion and the bailouts now represent nearly 2/3 of the nations entire GDP of $13.1 trillion.

According to the Congressional Research Service, the total value of the bailouts undertaken by the federal government exceeds inflation-adjusted spending for all American wars. The American Revolution, the War of 1812, the Civil War, the Spanish American War, World War I, World War II, Korea, Vietnam, Iraq and Afghanistan combined cost $7.2 trillion in today’s dollars. Even much maligned spending on the current Iraq war has to date totaled only $648 billion, a figure that pales next to the extraordinary deficit spending for corporate welfare. Throw in all spending for the Louisiana Purchase, the New Deal, the Marshall Plan and NASA, and you still haven’t topped the bailout spending spree of 2008.

America’s present debt equals about $37,000 per person. Representative Price of Georgia said, "By bailing out automakers without real reform or long-term solutions, we are only protracting uncertainty and putting billions of tax dollars at grave risk. It is now clear that the creation of TARP was a rueful mistake which has failed to provide urgent market stability, yet has put our country perilously in debt for the foreseeable future."

Congressman Ralph M. Hall, Chairman of the Free Congress Foundation Board of Directors, and President Marion Edwyn Harrison, sadly announce the death of the Founder and National Chairman, Paul M. Weyrich. 

Paul Weyrich, 66, died this morning while briefly hospitalized near his home in Northern Virginia. A contributory cause of death was methicillin-resistant staph aureus, commonly termed MRSA. For some years Paul Weyrich had been in a wheelchair, due to a combination of illnesses and a fall many years ago on black ice.

 While hospitalized a number of times, and often in pain, Paul continued his admirable and extensive work as a leader of the cultural, political and social conservative movement. 

Paul founded not only the Free Congress Foundation but also the Heritage Foundation and was the first Heritage President. While still a student in his native Wisconsin he became a radio and MILWAUKEE SENTINEL newspaper reporter and then a CBS political reporter and newscaster in Milwaukee. In 1966 he came to Washington, initially handling press relations and other assignments for Senators Gordon L. Allot, of Colorado, and Carl T. Curtis, of Nebraska.

In 1973 Paul Weyrich created the Heritage Foundation and in 1974 he created the predecessor to Free Congress Foundation. For several years he also operated a television cable channel. He held the highest honorary position in the Council for National Policy. During the past 35 years he extensively advised, spoke and wrote on cultural and other aspects of conservatism. In and after 1989 Paul visited the formerly Communist Soviet Union, organizing training courses for the promotion of democracy and individual rights. Paul also was an expert on rail and light-rail transit, having served as an AMTRAK Director and a National Surface Transportation Policy and Revenue Study Commissioner. 

In 1990 Paul was ordained a deacon in the Melkite Greek Eparchy, a conservative Catholic Church. 

Paul Weyrich is survived by his wife of 45 years, the former Joyce Ann Smigun, their five children and 15 grandchildren.

Steadfast and courageous in causes and faith, and admirably stoic in continuing his extensive work during many years of illness, Paul Michael Weyrich will be missed by the many people with whom he worked and by his family and numerous friends.

Funeral arrangements are not yet concluded.  More information will become available through a call to the Free Congress Foundation, 703 837-0030, and on the website, www.freecongress.org.