Nationwide State Bail Out is Not in Best Interest of Hawaii

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BY U.S. REP. CHARLES DJOU, R-HI- For every problem facing our nation, the answer from Congress has been to spend and spend some more. In the past two years, the federal government has launched an unprecedented increase in spending, including: the $862 billion “stimulus” bill, which has yet to produce the promised economic growth and job creation; legislation signed by the President that resulted in an 84 % increase in non-defense discretionary spending, including “stimulus”; and the government takeover of the health care sector, which will increase spending by $2.6 trillion when fully implemented. We were told that borrowing and spending billions would keep unemployment from rising above 8%. We were promised that borrowing and spending billions would save or create 3 million jobs.

Despite all of this spending, our economic woes have worsened. We have lost 2.5 million jobs since the stimulus was passed. Nationally, the unemployment rate went from 8.2% to nearly 10%. In Hawaii, the unemployment rate went from 6.3% to 6.6%. Meanwhile, our annual projected deficits have jumped to nearly $8.5 trillion over 10 years. Altogether, we now owe over $43,000 for each man, woman and child in the United States. These are frightening numbers. And the government doesn’t know how it will pay the money back.


We can debate whether bailouts and stimulus spending were good policy when they were proposed. In the end, even the best policies and the best intentions have to be measured against their consequences. The consequence of our rapacious borrowing and spending has been to put America in a worse spot than it was two years ago. It is clear that the stimulus hasn’t worked. It is clear that our deficit has become unsustainable. And if we keep doing the same things, we’re going to get the same dismal results. It is time to change direction.

Yet hardly a week into the August recess, Congress was called back into session (at no small cost to the taxpayers) to spend another $26 billion. The spending has been called an “emergency.” The spending has been dubbed an “education jobs bill.” The reality is that this spending is another bailout, which, like all bailouts, puts off tough decisions and rewards fiscal irresponsibility. Last time, the taxpayers bailed out irresponsible corporations. This time, the taxpayers are bailing out irresponsible state governments.

Where is the money going? The bill spends $10 billion on a so-called “education jobs fund.” But education jobs in Hawaii are not in jeopardy. Our budget was already balanced. All teacher furlough days had already been eliminated. Instead of helping Hawaii, our taxpayers are bailing out other states. The few million dollars that Hawaii will receive do not make up for the billions of dollars that we now collectively owe. This is misguided and fundamentally unfair to Hawaii.

The bill also designates $16 billion for Medicaid. Medicaid is an unfunded federal mandate, which means that the federal government tells states what to do but doesn’t give states the money to do it. Unfunded mandates are a problem for Hawaii and every other state in the Union. But spending $16 billion—only a fraction of which will go to Hawaii—will not solve the problem. By temporarily funding unsustainable demands, we only make the underlying problem worse. The difficult decisions that we avoid today will become the crises of tomorrow.  We can do better. We must do better.