2022 is no exception. Since 1991, Congress has failed to pass its twelve appropriations bills. To avoid public failure, Congress takes the easy route. It bundles all spending into the proverbial secret Santa grab bag called an Omnibus appropriation. The corporatists and social advocates, like children opening presents, must wait to find out what they got until they can read the new law. The timing is usually the end of the year before Congress goes home for Christmas.

While Republicans claim they want to stop the next giveaway, they want their share of gifts even more. For this year’s share, several Republicans will likely help the Democrat business community keep their prize gifts, favorable tax treatment for research and development, and carried interest. The social activists want billions of dollars of higher childcare tax credits. The final deal is always more spending, never less.

Since the beginning of the republic, there has been a debate over the scope of Congress’s power to spend our money and then tax us to generate more money for Congress to spend. James Madison argued Congress could only spend on the items enumerated in the Constitution. Alexander Hamilton argued the Constitution’s Spending clause is independent of the enumerated powers, thus allowing Congress to tax and spend as it deems necessary. The only limitation – spending must be for the general welfare, and Congress is the only institution that determines the general welfare.

Continuing to debate the limits of Congressional spending is a waste of time. The Supreme Court has made it clear that Congress can spend on whatever it wants as long as it promotes the general welfare.

Such a broad interpretation of Congress’ ability to tax and spend has resulted in a massive expansion of government and a $31 plus a trillion national debt.  The growth of the national debt will likely force posterity into involuntary servitude to the federal government. Most troubling is that the general welfare has morphed from building canals, bridges, and highways to make the U.S. an economic superpower into trillions of dollars of gifts to special interests and friends. These gifts to private entities come in the form of grants, tax credits, low rates, loan forgiveness, and paycheck protection plans.

Listed below are a few of the thousands of congressional gifts to private parties.

Suspending  $20 billion of student loan payments for two years and now seeking $600 billion more in student loan forgiveness based on the Higher Education Relief Opportunities Act of 2003, an act that addresses national welfare emergencies.

$ 721 billion was given in grants to states as a bribe to manage federal programs enacted outside the constitutional authority of Congress to legislate.

Forgiving tens of billions of dollars of federal Paycheck Protection Program loans made to organizations controlled by the elite rich such as Paul Pelosi (husband of the Speaker of the House); Khloe Kardashian, Tom Brady and Reese Witherspoon, Forbes Media, Ruth Chris Steakhouse, The Washington Times, and more than a few members of Congress.

$16 billion was given in farm aid to offset losses suffered by farmers on tariffs imposed on products sold to China. The top 10% of farmers receive 70% of the subsidies. This top 10% includes insurance companies, multinational corporations, and corporate farms.

Flood insurance subsidies are given to insure high-end housing in flood-prone areas, i.e., beach front properties. This insurance program is potentially liable for $1.3 trillion in flood claims while only collecting $3.5 billion in annual premiums. The program already has $25 billion in losses taxpayers will have to pay.

The $330 billion prescription drug industry received $64 billion in federal research funding, along with  immunity for any harm their drugs may cause.

Most recently, through the falsely named “Inflation Reduction Act,” Congress authorized $370 in new tax credits for corporations and individuals if they acquire green energy products or build green energy facilities. These tax credits are in addition to federal regulations imposing energy efficiency requirements on at least sixty products and $577 billion in tax credits and grants for green energy projects since 2004. The tax credits are to boost corporate sales of electric vehicles, the installation of rooftop solar panels, the development of solar power systems, heat pumps, water heaters, space heating, electric stoves, circuit breaker boxes, additional home insulation, and exterior windows, to name a few beneficiaries.

A week before the passage of the IRA, Congress authorized $280 billion to incentivize the semiconductor industry to build plants in the U.S. and invest in new research. The $ 573 billion semiconductor industry is expected to grow to $1.4 trillion by 2029 due to high product demand.

With a $31 trillion-plus national debt, citizens need to appreciate that every taxpayer owes $247,882 as their portion of the debt.

Christmas gifts to children are rewarding when parents see happiness in their eyes. Unfortunately, as some of these children grow up, they still expect gifts from the real Santa Claus, the federal government. The federal government likes playing Santa but never considers the immutable fact that the only money the federal government has is what it takes from taxpayers. The federal Santa game is simple. The federal government sees the glimmer in the eyes of its friends when they find out about the billion-dollar gifts they received for doing nothing. This tradition is the true meaning of a Washington, DC Christmas.

The post Yes, Virginia, The Federal Government is the Real Santa Claus appeared first on The Libertarian Republic.

Should Congress consistently give billions of our hard-earned dollars to private entities?

While common sense says NO, it is unfortunate that Congress fails the common-sense test.

The issue of Congress giving away our money to private entities has been debated since the founding of the Republic. Opponents of this giving argue taxpayer money can only be spent on matters enumerated in the Constitution. Government asserts it can spend it on anything that is for the general welfare.

Continuing this debate may seem irrelevant since the courts have made it clear legislatures determine what is general welfare. Such a broad interpretation of governments’ ability to tax and spend has resulted in a massive increase in the national debt and a huge expansion of government. The federal government gives grants, loans, tax credits, tax deferments and guarantees risk to incentivize certain activities. State and local governments provide property tax relief, tax abatements, low interest bonds and outright grants, usually to attract business to an area.

Examples abound at the federal level:

–  $16 billion in farm aid to offset losses from tariffs on China. The top 10% of farmers received 70% of the subsidies; Up to a $7,500 tax break for purchasers of the first 200,000 electric vehicles produced by an auto manufacturer;

–  Oil and gas industries receive $20 billion in annual subsidies;

–  Tax deferment on capital gains from Opportunity Zone investment which was to go to poor areas but is a boon to rich areas, e.g. high-end apartments with yoga lawns and pools surrounded by cabanas and daybeds;

–  The prescription drug industry benefited from $64 billion in federal research funding; and

–  Flood insurance subsidies promote building high-end housing in flood prone areas. This insurance program is potentially liable for $1.24 trillion in claims while only collecting $3.5 billion in annual premiums. The program is already over $25 billion in losses that taxpayers will have to pay.

Presently the U.S. carries over $23 trillion in national debt and could be on the hook for over $200 trillion in unfunded liabilities. Yet government continues to give away billions to private entities.

 While there is almost no limit to governments’ power to give away taxpayers’ money, there are historical precedents for limiting such gifts. In the mid-1800s, many municipalities and states used public funds to purchase stock in railroads being built across the continent. Many government entities were swindled out of large amounts of money. To prevent future losses, forty-six states enacted constitutional limitations preventing gifts to private entities. These restrictions were called “gift clauses” or “anti-donation” clauses or simply “government gift-prohibitions.”

The government gift-prohibition policies barred state and local governments from giving or loaning public funds to private corporations or associations for private undertakings. Initially, these provisions stopped government speculation with taxpayer money. Over time, however, the courts defined public welfare to be anything that has a “public purpose.” Fitting within this definition is almost every type of government project conceived by a legislature, e.g. parking lots, sports facilities, corporate rent subsidies, politically favored forms of energy. Taxpayer money just flows, and the courts find it legal, based on legislated appropriations.

More troubling is that government gives taxpayer money to the largest and most profitable corporations in the world. The Good Jobs First report traccks the one hundred largest companies receiving government gifts (federal, state, local). First on the list is Boeing at $14.9 billion; number two is General Motors at $6.9 billion and number three is Intel at $6 billion. Most companies on the list are in energy, transportation or technology.

These large corporations persuaded our government that a tax cut would spur investment in new business and equipment. These corporations however, spent three times as much on additional dividends and stock buybacks than they invested in their businesses.

Action

We the people need to clearly re-enact the wise policies of the mid-1800s and demand all candidates running for office take a government gift-prohibitions pledge:

I pledge that, if elected, I will serve as a fiduciary of public money and will not vote to give, grant, or loan public funds or extend the credit of the public to any private corporation, association, or private undertaking.

By asking every candidate for public office to take this pledge, citizens can identify candidates willing to protect taxpayers. If the pledge is broken, the public will quickly know who is not trustworthy. The entire effort becomes self-policing by citizens.

It’s a modest proposal, but it is a start!

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