Saturday, May 14, 2011

Governor Palin and Forward Focused Leadership--Part II

Last weekend, I wrote a post on how Governor Palin has exhibited forward focused leadership on energy--both with oil and natural gas developments. Just as it takes forward focused leadership to make decisions to lead a state and nation down a path of energy independence and security, it also takes forward focused leadership (and courage) to make serious steps to approach budgeting with frugality and to address needed entitlement reforms and the immoral national debt. Discussions on whether or not the debt ceiling should be raised have been swirling throughout the country over the last several weeks. The debt ceiling is a level that Congress sets stating how much money they can legally borrow, somewhat like a level of credit on your credit card. The ceiling was first set in 1917 and has been raised 74 times since 1962.It is argued that debt ceiling must be raised in order to avoid defaulting on payments on our debt or that draconian tax increases or spending cuts must occur in order for this to be dealt with appropriately. However, the debt ceiling, budgets, and entitlement reform can't be placed into fiscal silos and separately addressed. They are interrelated. Smart and frugal decision making today regarding all of these issues will help stave off major financial problems in the future.

Governor Palin has been very clear on her thoughts on raising the debt ceiling. Hells no! She has instead offered some alternatives to address the debt ceiling and concurrently the budget. She has suggested servicing the debt first using the revenue the government already takes in and concentrating spending only on the nation's highest priorities and allowing states to make decisions on funding lower priority projects. Governor Palin has also suggested that not raising the debt ceiling will show America's lenders and the international financial markets that the nation is serious about addressing the debt problem, a viewpoint right inline with many conservative investors and economists.

Looking beyond solely the debt ceiling, Governor Palin has made very strong statements about federal spending by challenging both Democrats and Republicans. In a letter to Congressional freshmen last November, she urged them to cap spending at 2008 levels, yet the FY2011 budget that was finally settled on was $778 billion more than the 2008 budget. Governor Palin asserted that this budget deal reached last month was not what America needed as spending was just increased nearly 30% to be cut by less than 1%.She has suggested that President Obama's only vision for America's future is only securing his re-election and that his most recent budget is only a "political document", saying further:
Let’s look at the numbers. We have a $1.5 trillion deficit this year. We’re paying $200 billion a year on our interest alone. That’s half a billion dollars per day on interest. And our $1.5 trillion deficit means that we’re borrowing $4 billion per day just to keep afloat. So, we pat ourselves on the back if we cut a billion dollars here or a billion there in discretionary spending, as we borrow $4 billion a day and pay half a billion a day in interest. The deficit for the month of February alone was the highest in our history at $223 billion. That’s more than the entire deficit for the year 2007. And there’s no end in sight. We’re not heading towards the iceberg. We’ve already hit it. Now we’re taking on water. We must find a way to get back to harbor to repair our ship of state before it’s too late.

[...]

Real leadership means leading by example. It means showing an “all-in” commitment to tackling complex issues and putting in the time and effort to educate the American public. Right now the American people have not been educated about this major challenge we face. Keep in mind that perception often becomes reality, and the perception President Obama has repeatedly given off is that he can’t be bothered to deal with our debt crisis.
Governor Palin also realizes that addressing America's debt problem not only involves the year-to-year budget battles. It means seriously taking a look at entitlement programs like Medicare and Social Security. Both of those programs have shown to be in an even greater mess than previously thought with monies to fully fund Medicare drying up in 2024 and funds for Social Security running short in 2036, earlier than previously estimated which also, according to and Investors' Business Daily article re-tweeted by Governor Palin yesterday, will add $5 trillion to the debt. This supports even further that the reforms proposed by Congressman Paul Ryan and supported by Governor Palin are needed.

In an interview with Time Magazine in mid December 2010, Governor Palin said:
I’d also look for entitlement reform, as well as a system-wide audit of government spending with a goal to move us toward zero-based budgeting practices and ultimately a balanced budget. We need to start really living within our means. As any mother or father will tell you, you don’t spend what you don’t have. And if the argument against this is that the government is too big and unruly to even consider such an audit, then I say that that alone is all the proof you need that our government has grown completely out of control and desperately needs to be reined in.
Later that month, Congressman Paul Ryan released a roadmap that seriously addressed spending and entitlements which Governor Palin supported. In her op-ed supporting this plan, Governor Palin highlighted the needs for these reforms:
On Social Security, as with Medicare, the Roadmap honors our commitments to those who are already receiving benefits by guaranteeing all existing rights to people over the age of 55. Those below that age are offered a choice: They can remain in the traditional government-run system or direct a portion of their payroll taxes to personal accounts, owned by them, managed by the Social Security Administration and guaranteed by the federal government. Under the Roadmap’s proposals, they can pass these savings onto their heirs. The current Medicaid system, the majority of which is paid for by the federal government but administered by the states, would be replaced by a block-grant system that would reward economizing states.

Together these reforms help to secure our entitlement programs for the 21st century. According to the Congressional Budget Office (CBO), the Roadmap would lead to lower deficits and a much lower federal debt. The CBO estimates that under current spending plans, our federal debt would rise to 87% of GDP by 2020, to 223% by 2040, and to 433% by 2060. Under Rep. Ryan’s Roadmap, the CBO estimates that debt would rise much more slowly, peaking at 99% in 2040 and then dropping back to 77% by 2060.
Governor Palin realizes that leadership must be forward focused. Leadership is not raising the debt ceiling, then kicking the can further down the road for others to deal with. It's not ignoring the problems with programs like Medicare and Social Security. Leadership is taking a strong stance on spending and debt, and it is honoring commitments to those who are already recipients of Medicare and Social Security, while reforming the programs so that America and the programs themselves can remain solvent.

In a Facebook post that I referenced earlier, Governor Palin stated that real leadership means leading by example.This is precisely what she has done. Her statements on budgeting and addressing governmental commitments while making need reforms are right in line with what she achieved and stood for as Governor. As Governor, she recognized that budgeting must be future focused. When oil revenues were high, the Alaska state coffers were filled to the brim. The temptation for many would be to spend, spend, spend, but this was not Governor Palin's strategy. She addressed fiscal priorities and put money into savings:
Most importantly, Alaska enjoys a $12 billion surplus thanks to ACES and the sound fiscal policies of my administration. I put billions of dollars aside in savings accounts (though I could have easily spent those billions and made a lot of friends with big-spending legislators on both sides of the aisle), and I continued to veto excess spending and Obama stimulus funds, and chopped earmarks by 86% – much to the chagrin of liberal legislators who were used as “sources” in the article. It’s kind of amusing to see state legislators claim credit for the surplus when they didn’t vote for ACES, and they cried to high heaven when I vetoed their wasteful spending on their special interest projects.

Of course, I could have made a lot more friends in Juneau if I had spent the surplus. But I chose to put billions in savings for a rainy day and return a portion to the people of Alaska. (It was their money after all.) I paid down hundreds of millions of dollars into our under-funded state pension plans, then set aside another billion for forward-funding education. I fought the union’s demands for more benefits, engaged in hiring freezes, and cut frivolous state expenditures – again, much to the chagrin of those who spend other people’s money recklessly. That’s sound fiscal policy. I’m proud of it, and Alaska is stronger today because of it.
Governor Palin's record is one of forward focused leadership. She used a budgetary surplus to address education and pensions, but she also vetoed spending projects--vetoing nearly a quarter billion dollars in 2007 alone. She also put billions in savings--saving for a time when the financial outlook was not as sunny. She not only cut earmarks by 86%, she cut overall spending by 9.5% during her time as governor. Many governmental executives are praised if they merely slow the rate of spending, but Governor Palin instituted real cuts. Our national debt stands at more than $14 trillion currently. Forward focused leadership is needed, not fiscal myopia focused solely on political expediency. Governor Palin enacted such a vision in Alaska. She cut spending and put money into savings during good financial times, and she realizes that when times are not good cutting spending and addressing entitlements is needed to help keep America from driving off a fiscal cliff. To address the fiscal problems of this nation, we don't need a politician; we need a leader.




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