One of my son's Suzuki violin teachers had a wise twist on an old saying: "If at first you don't succeed, try something else." The corollary? "When you do succeed, don't stop. Do it again." The White House could use some remedial Suzuki lessons in economics. They've got everything completely bass-ackward.
In February 2009, President Obama signed the trillion-dollar American Recovery and Reinvestment Act. Nearly $115 billion was earmarked for education. The stimulator-in-chief's crack team of Ivy League economists predicted the law would hold the jobless rate under 8.5 percent.
The actual unemployment rate in October 2009 skyrocketed to a whopping 10.2 percent.
In August 2010, President Obama went back to the well. With deep-pocketed public employee unions by his side, he lobbied hard for the so-called "EduJobs" bill—$26 billion more to bail out bankrupt states, school districts and public hospitals. Nearly half went to teachers, whose unions raked in an estimated $50 million in rank-and-file dues as a result. Obama's economists had promised the jobless rate would be down to 7.9 percent by then.
The actual unemployment rate in August 2010 was 9.6 percent.
Now, after the Senate rejected President Rerun's latest half-trillion-dollar stimulus proposal, Obama and Senate Majority Leader Harry Reid are pushing for a "mini" $30 billion union jobs package for teachers (with $5 billion to mollify police and firefighters unions). In addition to funding fantastical green school construction jobs (earmarked for unionized-only contractors in an industry that is 85 percent nonunion), the EduJobs III bill will purportedly "save" 400,000 education jobs at an average cost of nearly $80,000 per job. Those will be paid for with a 0.5 percent surtax on millionaires. The job-savings estimates come from the same economic wunderkinds who predicted the jobless rate today would be 7.1 percent.
The actual unemployment rate reported this month is 9.1 percent. While the White House decries layoffs, the inconvenient truth is that the EduJobs III union payoff is a drop in the bucket compared to the millions laid off in the private sector. According to official government statistics, the share of the eligible population now holding a job has sunk to 58.1 percent, the lowest since July 1983.
So, where did all the original EduJobs money go? One survey [PDF] by the Center on Education Policy found that much of the cash went to bolster fringe benefits and administrative staff. The Fordham Institute's education analyst Chris Tessone noted: "There is no reason to expect anything but business as usual from another round of subsidies. ... More subsidies just protect the status quo at great expense to taxpayers."
While strapped, reckless-spending school districts bemoan the edge of the federal "funding cliff," another chunk of the EduJobs money went to states that didn't even need it—and had kept their teacher payrolls full through responsible fiscal stewardship. As education journalist Chris Moody reported last summer, states including North Dakota, Tennessee, Arkansas and Alaska whose budgets are in the black received tens of millions in superfluous school subsidies. "Arkansas," Moody found, "has a fully funded teaching staff for the coming year, but the state will still receive up to $91 million for teaching jobs."
In Alaska, school districts had already made hiring decisions for teachers and apportioned the children in each class based upon those numbers. Nevertheless, to fulfill their teachers union-pandering mission, Obama showered the state with $24 million under the bill—money that a state education bureaucrat acknowledged "probably would not go to adding new teachers."
Other states, such as Illinois and West Virginia, raked in hundreds of millions more in EduJobs dough even though they hadn't yet burned through 2009 education stimulus money. In fact, a total of 20 states and the District of Columbia have spent less than 5 percent of their allotments, according to Education Week magazine.
An Obama education official helpfully suggested that the unneeded money be spent on "on-campus therapists" instead.
Many other school districts failed to heed warnings against binging on full-time hiring sprees with temporary funding. Education Week reported this spring that the New Hanover County (N.C.) school district used $4.8 million in short-term EduJobs money to fund 88 teaching positions, in addition to more than 100 classroom slots funded with 2009 stimulus tax dollars. Obama and the Democrats blame meanie Republicans for the fiscal emergencies these districts now face.
But who devoured the Beltway candy instead of eating their peas? Washington rewards bloated school pensions, Taj Mahal construction outlays and chronic local education budget shortfalls by pouring more money down their sinkholes. Instead of incentivizing fixes, politicians—dependent on teachers union campaign contributions and human shield photo-ops—incentivize more failure.
The solution to this vicious cycle of profligacy? It's elementary: Try something else.