Latest news with #fiscalresponsibility
Globe and Mail
10 hours ago
- Business
- Globe and Mail
Public service reform is only possible if the Prime Minister champions the project
Donald J. Savoie is the author of Speaking Truth To Canadians About Their Public Service. It is clear that Ottawa is looking to get its fiscal house in order. On the campaign trail, the Liberals and Conservatives both talked about getting the cost of government operations under control, with both, pledging to reduce spending on outside consultants, currently running at $16-billion a year. Who could possibly disagree with that? But both parties were less forthcoming when talking about the ideal size of the public service. The Liberals pledged to implement a cap, a promise that makes some sense in a campaign because no difficult decisions are required until after the election; the commitment only matters if they win. But it also suggests that to them, the size of the federal public service is about right at current levels, even though it has grown by more than 40 per cent over the past 10 years. Now that the Liberals are back in power, however, a cap will prove unworkable. History has shown that these efforts will invariably generate new committees and countless meetings, which will only produce reports, not actual change. An ambitious reform of the federal public service is needed. It is necessary to improve morale, to streamline decision-making, to reduce the cost of government operations, to empower frontline managers, and to give meaningful careers to more public servants. It will be hard, and it may not be popular – I do not believe that it is possible to meaningfully reform the federal public service without taking a fresh look at the work of public sector unions – and so it will require a sustained commitment to see a bold agenda through to its end. Achieving this will require direct engagement from the most powerful man in the country: the Prime Minister. The current federal government is Ottawa-centric – indeed, Mark Carney is a former senior federal Finance official, and represents an Ottawa constituency in Parliament. The most senior public servants are typically a product of the Ottawa system, too; many have no private sector experience or even experience outside of Ottawa delivering programs to Canadians. This can be both good and bad: good because they have an intimate knowledge of how the government decides what does and does not work, but bad because career government officials are not known for charting bold reforms. Cutting public service staff is hard because there are no market forces and bottom line forcing the issue. As history has often shown, it is easier to let things drift until they leave government. Once outside government, officials are far more forthcoming about what needs to be done. In recent weeks, we have seen several of them in this newspaper and elsewhere calling for substantial cuts in the number of senior positions in Ottawa, in the number of cabinet ministers, in the size of central agencies and in programs. This calls for high-level decisions that go far beyond capping the public service. In the mid-1990s, Jean Chrétien's successful program review exercise showed that the Prime Minister must have a direct hands-on approach for an ambitious agenda to have any chance of success. It is an issue that Mr. Carney must own because it is his government, and the machinery of government matters cannot be delegated. The problem is that there is no shortage of urgent things for the Prime Minister to attend to. This, more than any other reason, explains why past public service reform efforts have failed. No other ministry is capable of taking up the project. The Department of Finance does not regard reforming government operations as part of its mandate. And while the Treasury Board does have the mandate, it doesn't have the will, the credibility or the support to pull it off, as it remains the poor cousin of central agencies, no match for the Privy Council Office or Finance. It can follow up on the government's commitment to cut back on the use of outside consultants, but that is probably as far as it can go. The government's agenda can be developed by asking a series of questions. What government structure is needed to promote a unified, single Canadian economy? How can we best redirect resources to high-priority areas such as trade and national defence? How can Ottawa pull back from more areas of provincial jurisdiction? The federal government has nearly 300 organizations, and it's time to weed out those that are past their best-before dates; the same can be said about some federal government programs. But unless the Prime Minister ensures that these questions are answered and action is taken, the government will be like the proverbial goldfish, going around and around in its bowl repeating nice castle, nice castle.
CBS News
3 days ago
- Business
- CBS News
Florida lawmakers reach budget agreement, set to finalize $900 million tax cut plan
Nearly a month after leaving the Capitol without passing a budget, House and Senate leaders said Friday night they had reached an agreement that will clear the way for lawmakers to begin hammering out details of a spending plan Tuesday. House Speaker Daniel Perez, R-Miami, and Senate President Ben Albritton, R-Wauchula, issued memos that indicated they expect to pass a budget for the 2025-2026 fiscal year on June 16. The memos came after weeks of behind-the-scenes talks aimed at trying to kick-start the conference negotiating process. Key financial priorities The memos said the agreement includes a $900 million tax cut through eliminating a tax on commercial leases, a longtime priority of business lobbyists. It also includes what the memos described as $350 million in "permanent sales tax exemptions targeted towards Florida families," $250 million in debt reduction and $750 million in annual payments into a state rainy-day fund. "In total, the framework set forth in these allocations provides for a fiscally responsible, balanced budget that reduces state spending, lowers per capita spending, and reduces the growth of state bureaucracy," Albritton wrote in his memo to senators. "The budget authorizes early payoff of state debt, accounts for significant, broad-based tax relief, and builds on historic state reserves for emergencies." Conference committees will start meeting Tuesday to negotiate details of the different parts of the budget, such as education, health care and criminal justice. Unresolved issues will go Thursday to House Budget Chairman Lawrence McClure, R-Dover, and Senate Appropriations Chairman Ed Hooper, R-Trinity, for further negotiations. The fiscal year will start July 1, which, if a budget passes June 16, will give Gov. Ron DeSantis two weeks to use his line-item veto authority. Past disagreements and new framework The House and Senate were unable to reach agreement on a budget before the scheduled May 2 end of the annual legislative session because of differences about tax cuts and spending levels. Lawmakers extended the session, but House and Senate leaders remained at odds as they worked behind the scenes. The House in April approved a plan that called for cutting the state sales-tax rate from 6 percent to 5.25 percent, which would have totaled roughly $5 billion. But the Senate did not go along and pitched a plan that included providing a sales-tax exemption on clothes and shoes valued at $75 or less, sales-tax "holidays" and trimming the commercial-lease tax. DeSantis, meanwhile, called for cutting property taxes and criticized the House's plan for reducing the sales-tax rate. Perez and Albritton indicated on May 2 that they had reached a "framework" that would include $2.8 billion in tax cuts, including reducing the sales-tax rate. But that later blew up, with Perez publicly accusing Albritton of backing out of the deal. But Albritton said senators had raised concerns that a cut in the sales-tax rate would not be "meaningful, felt, or seen by families and seniors when compared with other available options." The memos released Friday night did not provide details of the $350 million in sales-tax exemptions that are included in the latest agreement. They also did not mention property-tax cuts.
Yahoo
26-05-2025
- Politics
- Yahoo
Tariffs and price-fixing? It's time to make Republicans conservative again
If we're ever going to make America great again, we apparently need to trade protectionism, price controls and profligate spending to make happen. That's the kind of message I expected during President Barack Obama's administration. Yet here I am in 2025 being told by Washington Republicans that our path to victory is paved with big government policies—just as long as it's our big government, aimed squarely at "owning the libs." As a long-time conservative with a healthy dose of libertarian skepticism, let me tell you: Government power is and will always be the problem. The fleeting satisfaction of political wins from an overpowered executive branch only primes the weapon for the next liberal executive's use. We must be honest about what we're seeing from Republicans. Some of it is absolutely consistent with timeless principles of limited government, economic freedom, and fiscal responsibility. For example, the Trump administration's dogged adherence to the rule of law with respect to immigration is a refreshing change from countless lawless administrations who either ignored border security or engaged in selective immigration enforcement. But some of Trump's ideas are, simply put, progressive liberal priorities. "He's playing five-dimensional chess!" some will exclaim, assuring me there's a masterstroke afoot that my simple, principle-based brain can't comprehend. Others will shrug and say, "Well, he's a billionaire, so he understands economics better than you.' Perhaps more to the point, "He doesn't need anyone's money, so there's no corruption!" If triggering the opposition is the cardinal metric of success, then mission accomplished. #Winning Opinion: What's an oligarchy? With Trump's 'Big, Beautiful' bill, we're living in one. I understand the visceral appeal. Through media, business, and government, progressives have repeatedly shown a willingness to hammer Americans into believing, thinking, and feeling as they do. I can't tell you how many times I've explained federalism to my progressive friends only to be told that everyone in America deserves a one-size-fits-all policy from Washington. They certainly don't seem to like that answer now. Yes, government as a populist cudgel occasionally feels good for Republicans. We're simultaneously contorting ourselves to justify policies that would make Ronald Reagan or Milton Friedman spin in their graves. Let's start with something that should make any free-market advocate's skin crawl: government price-fixing. President Trump signed an executive order trying to tie American drug prices to those in other countries. I'm all for finding ways to lower drug costs, but government-mandated price controls? That's a funny way to champion free enterprise. Here's the real kicker, the part that should be a five-alarm fire for conservatives: None other than progressive Representative Ro Khanna, D-California, offered to introduce President Trump's drug pricing executive order as legislation, verbatim. Sen. Bernie Sanders, I-Vermont, chimed in with his support as well. Opinion: Don't call me a Republican. I'm a conservative. Trump and his MAGA GOP aren't. When Democrats are unreservedly eager to codify "conservative" policy, it's time to seriously re-evaluate whose playbook we're using. Price controls have a nasty habit of stifling innovation and leading to shortages – ask anyone who lived through Nixon's wage and price freezes. If we want cheaper drug prices, Congress should tighten up patents, radically improve the ability of Medicare and Medicaid to negotiate, and create a more reasonable regulatory process. Then there's the whole tariff saga. We were promised that "trade wars are good, and easy to win." How's that working out? As a strategic tool to enhance free trade, I understand, or at least thought I understood, Trump's gamble. While risky, slapping the globe with tariffs as a tool to get them to drop their tariffs on American goods and services makes a lot of sense. Then Trump could roll back American tariffs and take a victory lap for the greatest American economic windfall in several generations. Opinion alerts: Get columns from your favorite columnists + expert analysis on top issues, delivered straight to your device through the USA TODAY app. Don't have the app? Download it for free from your app store. If the U.K. trade deal is any indication, that's not what we're getting. In fact, the average effective tariff rate Americans will pay is about nine percentage points higher than before Trump's 'Liberation Day.' Let's be clear: tariffs are taxes. They are taxes paid by American importers, who then pass those costs on to American consumers. In the name of being tough, we ended up taxing ourselves. Consumers should decide what we want and what we're willing to pay, not politicians. Republicans have also forgotten a healthy skepticism of authoritarian foreign powers with a checkered past. No, I'm not talking about Vladimir Putin this time. President Trump accepting a luxury jet from Qatar, a nation that has a documented history of funding groups hostile to the United States, sends a profoundly disturbing message. It suggests that access and influence in the White House can be bought, or at least heavily swayed, by those with deep pockets and questionable motives. Just because something can be done doesn't mean it should be. Aren't we supposed to be draining the 'swamp'? How can we credibly criticize Hunter Biden's influence peddling if we're turning a blind eye to similar behavior on our own side? Help me understand how $TRUMP cryptocurrency run by Donald Trump Jr. is any different than the younger Biden's artwork. It has no real value beside what people are willing to pay for it. Some folks might tell you that conservative principles are old-fashioned, dusty concepts from a bygone era. They'd have you believe we must "evolve" past them to win. But let's be clear: principles don't have an expiration date. They aren't fads that come and go like our politicians. They are the difference between a society that cherishes liberty and one that stumbles blindly into a thousand years of darkness. USA TODAY Network Tennessee Columnist Cameron Smith is a Memphis-born, Brentwood-raised recovering political attorney raising four boys in Nolensville, Tennessee, with his particularly patient wife, Justine. Direct outrage or agreement to or @DCameronSmith on Twitter. This column first appeared in the Tennessean. You can read diverse opinions from our USA TODAY columnists and other writers on the Opinion front page, on X, formerly Twitter, @usatodayopinion and in our Opinion newsletter. This article originally appeared on Nashville Tennessean: Trump's tariffs and plan for drug prices lean liberal | Opinion
Yahoo
25-05-2025
- Politics
- Yahoo
Noem fails to follow her own advice with taxpayer money
South Dakota Gov. Kristi Noem delivers her 2025 State of the State address to lawmakers at the Capitol in Pierre on Jan. 14, 2025. (Joshua Haiar/South Dakota Searchlight) During her tenure as the governor of South Dakota, Kristi Noem liked to remind legislators at budget time that the money they were dealing with was not their own. From a 2019 address to the Legislature: 'I'm committed to maintaining the fiscal integrity for which our state is known. We won't spend money we don't have. We will not raise taxes.' From 2022: 'I recognize that taxpayer dollars are not our own — they belong to the people of South Dakota. We all must remember throughout our budget discussions that this money belongs to the hard-working people of South Dakota.' From 2025: 'During my time as governor, I have always kept my budget proposals focused on our people, not government programs. After all, this is the people's money. They entrust it to us and expect us to spend it wisely and responsibly.' DHS Secretary Kristi Noem stumbles over questions from Democrats on habeas corpus Noem, Democrats tangle over protest at New Jersey immigrant detention center Noem revokes temporary deportation protections for some Afghans in the U.S. Full archive Those are good reminders that legislators should take to heart. However, it seems that Noem was just reading from the teleprompter rather than paying attention to her own advice. Recently Noem's actions with taxpayer dollars were the topic of discussion on a couple of fronts. A South Dakota Searchlight story noted that the Government Operations and Audit Committee in Pierre was trying to get answers about how Noem rang up $750,000 on her state credit card during her six years as governor. Noem admonished lawmakers to look out for the way taxpayer dollars were spent while she was racking up travel expenses on a book tour, a Canadian hunting excursion and various out-of-state political trips to tout the hopes of Republican candidates, including Donald Trump. Who's to say if South Dakota will ever have another governor like Noem who became the darling of the Republican Party for her reaction to the pandemic. During her many travels, she was quick to praise South Dakota's maskless response to the pandemic and just as quick to label as fake news anyone who dared point out that the state was leading the league in per capita COVID-19 deaths. Lawmakers on the committee learned that under the current laws, there isn't much that state bookkeepers can do when called on to cover a governor's credit card expenses. They can question a credit card charge, but if it isn't then handled voluntarily by the elected official, the state has to pay. Basically, the current law treats elected officials like adults. As adults, those officials should know when the people should pay and when they should reach into their own wallets to cover any expense that doesn't directly have anything to do with their elected positions. Given the example Noem set, lawmakers who took her advice about fiscal integrity seriously are now faced with proposing legislation that calls for creating some sort of credit card overseer or nanny. That's a move that wouldn't be needed if Noem's credit card use was more statesmanlike instead of resembling a sailor on leave. Another Searchlight story published on the same day chronicled Noem's appearance before the U.S. Senate Appropriations Subcommittee on Homeland Security. At the meeting, Noem had it pointed out that her new department has budget problems. 'Your department is out of control,' said Sen. Chris Murphy, a Democrat from Connecticut. 'You are running out of money.' Given that Noem has been given responsibility for Trump's signature issue — immigration control — it would certainly be a bad look for the president if the department charged with rounding up illegal immigrants ran out of funds before the end of the fiscal year. Fiscal restraint may be the order of the day as Noem works for a man who changes Cabinet secretaries the way other presidents changed their socks. For her part, Noem doesn't seem like she's pinching pennies, spending $100 million on TV commercials that praise Trump policies and warn immigrants not to come to the United States illegally. She has also unveiled a plan to offer $1,000 in 'travel assistance' to illegal immigrants who self-deport. The cost of that could be as much as $1 billion if Trump reaches his goal of deporting 1 million people. Those hardly seem like the actions of someone who has been entrusted by taxpayers to spend their funds 'wisely and responsibly.' All of Noem's budget guidance for South Dakota lawmakers should have come with another bit of helpful advice: Do as I say, not as I do. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Telegraph
25-05-2025
- Business
- Telegraph
Bond markets are in open revolt. A global reckoning is coming
When Rachel Reeves announced that she was axing the winter fuel allowance for all but the poorest pensioners, it was meant to send a clear signal to markets. Here is a chancellor, she was in effect saying, who is prepared to do really unpopular things in order to put the public finances back on a sustainable footing, and give investors the confidence they need to invest in UK plc. In the event, this act of political self-sacrifice turned out to be no more than a smokescreen. A revenue-raising Budget that takes the tax burden to a post-war record and a smattering of make-believe spending cuts have all been to no avail; Britain's fiscal predicament is continuing to deteriorate. This cannot have surprised anyone, because despite the pretence of fiscal responsibility, the Government keeps on granting public sector unions bumper pay awards. It happened last year and it's happening again this year, with pay offers which are considerably in excess of what's been budgeted for. There are also a multitude of other uses the Government keeps finding for your money. In any case, if the Chancellor cannot even hold the fort on the winter fuel payment – a relatively trivial saving, which against the great leviathan of state spending barely registers – what hope for anything more meaningful? Faced with a drubbing in recent local elections, in which the winter fuel allowance figured prominently as a source of doorstep complaint, the Government has folded like a pack of cards. It ought to be a resigning matter, but Labour's majority is so large that there is almost no climbdown that the Chancellor cannot perform without carrying on regardless. The debacle of the winter fuel allowance demonstrates anew that once an entitlement has been granted, it is almost impossible to remove. This is not a peculiarly British thing; it's much the same in virtually all economies where the demands of the welfare state have come to dominate mainstream political thinking. What's so worrying about this inability to confront harsh realities is that we are, absent of evasive action, only at the start of the long march towards even higher levels of welfare spending. Across the Western world, ageing populations – with a falling birth rate and baby boomers moving through to retirement – are putting downward pressure on revenues and upward pressure on spending. Analysis by the Office for Budget Responsibility suggests that based on policy settings as of March 2024, public spending in the UK over the next 50 years would rise from 45pc to 60pc of GDP, but that tax revenues would remain static at 40pc. As a result, public debt would rise rapidly from the late 2030s onwards to 274pc of GDP by 2075. With relatively short electoral cycles to contend with, governments around the world show little or no appetite to confront these pressures. A favourite Keynesian saying is that we should look after the present, and the future will take care of itself. Would that it were so easy: for many of today's political leaders, the threat of future insolvency is fast becoming today's problem to address. The canary in the coal mine was the debacle of the Liz Truss mini-Budget, when bond markets went on strike over a planned programme of unfunded tax cuts, forcing an abrupt about-turn in policy. The past week has seen further bond market rebellions, this time affecting the US and Japan. In Japan, yields surged after a government bond auction fell short, in part because the Bank of Japan is trying to scale back the support it has been giving to the market through quantitative easing. Those money-printing programmes – applied across virtually all advanced economies – have provided a steady source of demand for burgeoning government debt issuance, which would otherwise have struggled to find buyers. But now it's going into reverse. Even in Japan, one time land of the negative interest rate, investors are finding that the central bank is no longer prepared to provide past levels of support. Across the board, the supply of debt is beginning to outstrip demand. Similarly in the US, where bond markets are increasingly 'yippy', to use Donald Trump's description, following a credit downgrade and the passage through Congress of a hugely expansionary budget. Trump's sudden re-escalation late last week in his tariff wars has ironically brought some respite, with US Treasuries rediscovering some of their safe haven attributes. But it is unlikely to be any more than temporary. Why would you want to invest in a country that has launched a trade war against some of its closest allies? Still less one that through its 'one big, beautiful' tax bill threatens to perpetuate today's 6.5pc budget deficit into the indefinite future? Almost nowhere is there any sign of governments confronting the scale of the fiscal challenge they face. With rising market interest rates come higher debt servicing costs, further eating into any space governments might have for spending commitments. Particularly vulnerable to market jitters are countries where public debt is already at or above 100pc of GDP and where ongoing budget deficits are higher than that needed to stabilise debt at current levels. In no particular order, these countries are Japan, the US, the UK, France and Italy. All have suffered varying degrees of bond market turbulence in recent times. It's true that a 30-year bond issued last week by the UK Debt Management Office was hugely oversubscribed, but there is a price for everything, and at 5.4pc it was a particularly high one. Bond investors are already charging British taxpayers an arm and a leg for their money. If you believe the Bank of England is serious about returning the inflation rate to the mandated 2pc and holding it there, then yields like these are a steal. But they also tell us something new and alarming, which is that longer-dated G7 government debt is no longer regarded as 'risk-free'. With mounting doubts over whether governments are capable of honouring their obligations, significant risk premiums are creeping into its price, particularly with longer-dated maturities thought most at risk of some form of default. Nobody seems to have any answers, least of all the insurgent populist parties now making headway across large swathes of Continental Europe. Voter disillusionment with the political mainstream makes fertile territory for their all things to all men messaging. But by promising the earth, they threaten only further disappointment and division. Back in Britain, Angela Rayner, the Deputy Prime Minister, urges her colleagues to further increase taxes rather than risk the wrath of voters with more spending cuts. It's all just fiddling while Rome burns. If something cannot go on for ever, it will stop, said Herb Stein, Richard Nixon's economic adviser. A giant fiscal reckoning –global in nature – is fast approaching. The question is not if, but when the storm finally breaks.
