No Federal Bailouts for State or Local Governments

Following the 2010 election, many Americans were fuming about federal government bailouts of banks, auto companies (General Motors), and others. Less attention was paid to proposals to bail out state and local governments, which like the federal government, were refusing to bring spending in line. Instead, they were aiming to cash in on free money, printed or borrowed by the Federal Reserve.

By getting a bailout from the federal government, states could circumvent their state’s constitutions, most of which require a balanced budget, while also avoiding the political peril of a tax hike. So they built up deficits. Then went hat in hand to federal lawmakers, claiming that their all-important states needed a bailout too.

Sponsors of the 2010 Massachusetts Question 3 ballot initiative to roll back the state sales tax were acutely aware of the wastefulness in state spending. So they penned the below letter to Republicans who had run on anti-bailout platforms for Congress.

An Open Letter to the 242 Republicans in the U.S. House of Representatives

From Michael Cloud and Carla Howell
The Center For Small Government

Tuesday, January 18, 2011

Honorable Republican Representatives,

On behalf of roughly 45 million Americans who voted for you in the November 2, 2010 Elections,

On behalf of the more than 10 million Tea Party Supporters and Sympathizers among them…whose votes gave you victory,

For the purposes of federal government and state government fiscal responsibility, solvency, and financial common sense,

We request that all 242 Republican Members of the U.S. House of Representatives pledge to actively oppose and vote against all federal government bailouts for state governments or local governments.

No bailouts. No loans. No loan guarantees.

Not for California. Not for Massachusetts. Not for Illinois. Not for New York. Not for any state or local government.

They must live within their own means. They must reduce and remove fat and non-essential spending from their budgets. They must seek and find ways to accomplish their essential duties – with lower overhead and less money.

Just like private sector businesses.

You must not enable them to continue their reckless and irresponsible spending.

You must not enable state and local governments to postpone the day of financial reckoning.

They have behaved like spending junkies, like money drunks. Now they face detox. Some are begging for ‘just one more’ drink, ‘just one last dose’ of narcotics. Tomorrow they’ll get clean and sober…

That’s the addiction talking. Ignore it.

Once state and local officials realize that you will not bail them out, they will solve their own spending problems.

Once they come to terms with economic reality, they will seek and find cheaper, better, smarter ways to do their government’s essential tasks.

They will become more responsible and accountable stewards of government.

Because almost all of you 242 Republican Members of the U.S. House of Representatives ran campaigns promising to roll back federal overspending, to exercise fiscal restraint, and to end federal bailouts, we ask you to notify state governments and local governments that you will vote against bailing them out.

Together, your 242 Republican U.S. House votes against bailing out state and local governments give you a “Veto.”

Promising to exercise this Republican “Veto” – and using it, if the Senate or White House demands bailouts for state or local governments – will show Tea Party supporters, fiscal conservatives, libertarians, and independents that you keep your campaign pledges.

This may create momentum for your proposed federal spending cuts.

It may create momentum for 2012 Republican candidates for the U.S. House and Senate who promise to substantially cut federal government spending, borrowing, and taxing.

Perhaps even a like-minded Republican candidate for President.

It starts with you. Now.

Will you make this pledge?

Small government is beautiful,

Carla Howell and Michael Cloud
Center For Small Government
Publishers, Small Government News
Sponsors of Massachusetts Ballot Initiatives:
2010: Roll Back the Sales Tax to 3%
2008 and 2002: End the State Income Tax