Failed Leadership Results in Budget Fiasco

When Gov. Corbett sat with
House Republican leaders to sign “the budget” two weeks ago, the photo op said a lot about how the administration and those leaders failed to lead.  There were no Senators at the signing, and some of the bills that make up the budget took another two weeks to complete.

The seeds for this year’s budget fiasco were planted months ago, when the governor set out on a strategy to force the most unpopular and unwise items on his agenda through the legislature by pairing them with legislation desperately needed to maintain the safety of our roads, bridges and rail lines.

By holding funding for transportation projects – along with the 40,000 jobs that come with it – hostage to his disastrous liquor sell-off, the governor misread Pennsylvania’s working families.
Struggling to save face as his major priorities were killed during an intra-party feud, the governor is claiming a third on-time budget in a row.

Not so.

House Republican leaders inserted language in the budget’s fiscal code promising to legalize payday lending in Pennsylvania, a move that forced the Senate to fix and send it back to the House. 

Even using transportation to strong-arm Senators in his own party, and adding Rube Goldberg provisions to buy votes, the governor’s liquor privatization plan failed in the Senate where it had become so convoluted hardly anyone understood it.

As the summer passes, Pennsylvania still leads the nation in structurally deficient bridges and millions of trips are made across these bridges every day.  There is no transportation funding plan in place, leaving billions of dollars in projects in limbo and stalling a badly needed economic boost.

And transportation is only one job-creating initiative that was left undone after a dismal failure in leadership.  Here are others:

Medicaid Expansion:

Despite independent estimates that accepting federal funding for expanding Medicaid will create up to 40,000 jobs and pump $1.4 billion a year into Pennsylvania’s economy, House Republicans stripped bipartisan Senate acceptance of the funding from the Welfare Code and Senate Republicans acquiesced.

The Medicaid expansion, which would have given health-care access to 500,000 working Pennsylvanians, is fully funded by the federal government for three years and 90 percent funded after that.

The 40-10 vote in the Senate proves that Medicaid expansion has wide bipartisan support, but a few opponents in the House have prevented a vote there.

Education:

Also delayed by the last-minute collapse of cooperation was the funding package for Philadelphia schools.  While the budget contains aid for Philadelphia schools, including a one-time infusion of $45 million, passage of the Fiscal Code was needed to implement it.

The budget adds $130 million to be spread to schools statewide, but it does not earmark extra funds for economically hard-hit school districts around the state.
 
That small boost in funding does little to make up the nearly $1 billion in education budget cuts that were engineered by the Corbett administration over the last two years.  All told, between last year’s budget and this Corbett spending plan, Pennsylvania schools are still down at least $750 million. 

Economic Development and Job Creation:

While failing on transportation funding and Medicaid expansion, the budget does not include investments in job creation programs that will cut into unemployment. 

There is a discernible lack of direction or priority from the administration about job creation.  Instead, there is a single-minded focus to continue cutting jobs.

The budget flat funds important job creation assistance programs such as Regional Economic Partnerships, Discovered in PA or infrastructure facilities grants.

   Latest Reports Show Nation's Economy Still Recovering

According to the U.S. Department of Labor, more people were looking for work in the U.S. during June 2013.  This news, along with the recent upturn in the housing market, is a positive sign the nation’s economy is improving. 

Although the U.S. unemployment rate in June remained unchanged at 7.6 percent, job growth in leisure, hospitality, professional and business services, retail trade, health care and financial activities added 177,000 new jobs (individuals to the nation’s labor force) between June and July. 

While states’ unemployment levels for June are expected to be released in the upcoming weeks, the month of May saw numerous declines in unemployment rates around the nation, including Pennsylvania’s, which dropped a tenth of a percentage point to 7.5 percent last month. 

U.S. recovery efforts have been improving gradually this year; however, in an increasingly global economy, Europe’s struggles with unemployment and the euro may throw a wrench into U.S. progress. 

A brief glance around the world reveals the U.S. is faring better than Europe with regard to economic recovery and employment.  The eurozone’s latest labor report shows unemployment in this 17-country area lingers 4.6 percentage points above that of the U.S.  In nearly all of the countries that define this region, unemployment rates have increased since last year, especially in Spain and Greece, where unemployment has climbed above 25 percent in recent months.  These elevated percentages among the jobless populations overseas demonstrate the widespread impact of the Great Recession, and they serve to stave off a foreseeable end to the plights of debt-ridden governments and the unemployed.    

(Seasonally Adjusted)

(National Stats)                        Jun. 2012             May 2013                    Jun. 2013

Civilian Labor Force                  155,149,000          155,658,000                  155,835,000

Employment                             133,609,000         135,707,000                  135,902,000

Unemployment                         12,701,000            11,760,000                    11,777,000

Unemployment Rate                 8.2%                            7.6%                            7.6%