Bluegrass Beacon — Kentucky to the ‘trade deficit’: You’re fired!

BluegrassBeaconLogoConsidering the Bluegrass State last year exported $30 billion worth of goods and services – more than 33 other states – Kentuckians should vigorously oppose anything remotely associated with a “war on trade.”

American Enterprise Institute scholar Mark Perry rated the share of Kentucky’s economy in 2015 linked to imports and exports fifth-highest in the nation, comprising 34 percent – or $66 billion – of the commonwealth’s $193 billion GDP.

Perhaps Kentucky Gov. Matt Bevin, who recently conducted a trade mission to Japan, could find a way to strike up a cordial conversation with his good friend President Donald Trump to put the commander-in-chief at ease about this whole “trade-deficit” matter.

Bevin could even share some wisdom from flyover country by passing on Indiana University Southeast economics professor D. Eric Schansberg’s reason for claiming the trade deficit remains “the most misunderstood concept in economics.”

Schansberg, Ph.D., says the discussion about international trade often focuses heavily on the downside – which tends to be more visible in terms of some individuals losing out in a global economy – while nearly completely missing out on its subtle but significantly important benefits for an entire state or nation.

“Trade is good for the aggregate if not always for the individual,” he says.

Schansberg, who’s also a Bluegrass Institute scholar, notes that “exports lead to imports” and warns that attempting to artificially narrow the so-called “trade deficit” could result in fewer dollars invested in America’s economy.

“Everybody talks about the difference in goods and services exported versus imports when what really matters is investment surplus,” Schansberg says.

Shallow-thinking protectionists rarely dig deep enough to reach this important component in making their own determinations about the success or failure of free-trade relationships.

Why, these shallow paddlers must wonder, would Bevin travel to Japan to tout the commonwealth as an attractive investment option instead of chastising that nation because last year it only spent $1.1 billion in direct purchases from Kentucky while we as a state imported $5.1 billion worth of Japanese products?

Consider the rest of this trading-partnership story.

Not only are imports critical to keeping Kentucky at – or near – the top in the automotive, aerospace and pharmaceutical industries, but Japanese-owned companies now operate more than 180 facilities in our commonwealth.

And while Kentucky is the fifth-largest importer of Japanese goods – Japan is the No. 1 international investor in the Bluegrass State, having created 44,400 full-time positions in those facilities.

“Investment surplus,” anyone?

An important teaching moment could occur if our governor explained to the president why Kentucky exporting nearly $30 billion while importing almost $40 billion is worthy of replicating rather than punishing, which would only bring us more harm, anyhow.

Schansberg notes the last time America had a trade surplus was not during an uptick but when the economy tanked during the late 1970s.

“It’s because investors were looking at our economy and they didn’t see it as a great investment,” he said.

All those current imports mean more choices and better prices for consumers and industry. It means foreign investors look at today’s Kentucky and America and they like – really like – what they see.

Frenchman Frédéric Bastiat, a 19th-century champion of free-market economics, proposed reversing “the principle of the balance of trade and calculate the national profit from foreign trade in terms of the excess of imports over exports.”

Bastiat called this “excess” the “real profit,” and challenged the contemporary protectionists of his day to produce evidence showing otherwise.

“Even if our imports are infinite and our exports nothing, I defy you to prove to me that we should be the poorer for it,” he said.

Jim Waters is president of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read his weekly Bluegrass Beacon column at He can be reached at and @bipps on Twitter.

Kentucky: ‘Polish that jewel’

“Kentucky is a beautiful jewel in the mosaic that is the United States of America. Unfortunately, years of bad policy and crony politics have allowed that jewel to gather dust. Our administration is going to unite with Kentucky voters of both parties to polish that jewel until it shines like a beacon of excellence for all the world to see. The election of 2016 will be written about as a victory for the GOP. It was more than that. A victory was won for the people of Kentucky and the people of America. The roar is coming through loud and clear.” –Gov. Matt Bevin in this op-ed

Quote of the day: The contrast between Obama’s and Bevin’s executive orders ‘could not be starker’

“I’ve heard the Courier-Journal call out Kentucky Republicans for applauding Gov. Bevin’s actions after having criticized President Obama’s executive orders over the past seven years. The flaw in this argument is there is a statute on the books in Kentucky specifically authorizing Gov. Bevin’s actions. There is no such federal statute to authorize the president’s actions. The contrast could not be starker: Gov. Bevin’s executive orders reorganizing various boards and commissions have been issued pursuant to statutory authority, while President Obama’s attempts to rule by executive fiat are often directly contrary to statutory authority.” –Rep. Phil Moffett, R-Louisville, in his op-ed in today’s (Louisville) Courier-Journal

BIPPS on KentuckyWired’s downsizing

[resized] Watchdog

Bluegrass Institute president Jim Waters, who attended the recent Shaping our Appalachian Region (SOAR) summit in Pikeville, is quoted on Waters points out that Gov. Matt Bevin’s announcement that the duplicative and costly KentuckyWired project had been scaled back is a ‘partial victory’ for taxpayers.

Read the complete article here.

The Bluegrass Institute also is quoted in a separate article found here, here, here, here, here and here covering Federal Communications Chairman Tom Wheeler’s announcement at the SOAR gathering that the feds would waste more taxpayer dollars on government broadband projects.

Bluegrass Beacon: More pension funding means more accountability

BluegrassBeaconLogoNontransparent state budget conference committee meetings aren’t the only places that armed state troopers can be found in the capitol these days.

They also showed up at a recent monthly meeting of the Kentucky Retirement Systems (KRS) board of trustees to help enforce Gov. Matt Bevin’s decision to prevent, bapparently by arrest if necessary, its now former chairman Tommy Elliott – who was in attendance – from participating.

Elliott had refused to leave and the board defiantly snubbed Bevin’s appointment of Madisonville dermatologist Dr. Bill Smith, who understands as well as any Kentuckian how the pension systems work.

While no one was arrested and Smith withdrew, my bet is there hasn’t been the potential of as much excitement at a meeting of excitement at a KRS board meeting since the state pension system was created in 1956 during Gov. A.B. “Happy” Chandler’s second stint as the commonwealth’s chief executive.

Much has changed since the state’s first known actuarial evaluation in 1957 revealed 16,000 participating employees in a Kentucky Employees Retirement System (KERS) with assets of $2.8 million.

Today, the state’s entire retirement system includes nearly 350,000 employees and retirees and nearly $20 billion in unfunded pension and insurance liabilities.

Add in the financial woes of the Kentucky Teachers’ Retirement System and the commonwealth faces a massive $37 billion in unfunded liabilities – the cost of benefits already earned by state workers that aren’t covered by the systems’ assets.

All of which makes me curious about why Jim Carroll of the Kentucky Government Retirees, a group advocating for pension reform, opposed replacing Elliott as KRS chairman while claiming the board needs “stability.”

Actually, it’s past time to shake the board up with qualified trustees who have the right kind of experience, will hold the system accountable for how it handles taxpayer dollars and won’t use their seat to raise funds for favored political causes or simply to protect the status quo.

Why would Carroll or anyone concerned about the survivability of these ailing pension funds favor protecting a status quo that has resulted in digging the pension hole much deeper than it was even when Elliott first took his seat on the board in 2011?

As that hole gets deeper, the news gets worse for taxpayers.

A new Pew Charitable Trusts report reveals that Kentuckians experienced the nation’s largest growth of unfunded-pension-liabilities-to-personal-income between 2003 and 2013. The amount of pension debt as part of our personal incomes rose from less than 3 percent in 2003 to nearly 15 percent in 2013.

Carroll, retirees receiving benefits and those who soon will be retired give Bevin enthusiastic high fives for increasing pension funding by more than $1 billion in the new state budget.

Achieving such funding without a huge tax increase means that other entites in the state budget, including colleges and universities, will be forced to endure significant cuts.

However, by defending Elliott’s presence on the board and calling for Bevin to back down from removing him, Carroll sends mixed signals.

To believe such massive increases in retirement systems’ funding forcing serious belt-tightening in Frankfort must not also be accompanied by attempts to bring more accountability to a board that’s been largely ineffective in addressing the nation’s ugliest pension crisis is unrealistic.

Bevin’s doing his part by appointing highly qualified board members like David Eager, a Louisville investment consultant, and John Farris, interim vice president for investments and chief financial officer at Centre College, and the state’s former Finance and Administration Cabinet secretary.

It’s past time for those pleased with more funding to show the same kind of interest in more accountability from Kentucky’s ailing and chaotic public retirement system.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at

Bluegrass Beacon: Don’t know a lot about pensions? See a doctor

BluegrassBeaconLogoI recently stood in Philadelphia’s Independence Hall, where 55 delegates gathered in May 1787 to create the U.S. Constitution and form a new government.

While that hallowed room is filled with desks and other period fixtures, the only original piece of furniture is the chair occupied by the future President George Washington while presiding over the convention.

Businessmen, merchants, shippers, farmers, scientists and physicians were framers of the document that would set their new nation on a path toward unprecedented freedom and prosperity.

If doctors were included in framing the foundation of this nation’s success, you will have a hard time convincing me that Madisonville dermatologist Bill Smith, M.D., is somehow unfit to serve on the board overseeing the troubled Kentucky Retirement Systems.

Smith, who served his country for nine years, rising to the rank of lieutenant commander in the U.S. Navy, full commander in the Navy Reserve and served a tour as a flight surgeon with the Marine Corps, founded his practice in 2000 and has grown it into a multimillion-dollar operation.

Smith while building his practice has studied state and local retirement systems, including helping Madisonville successfully address challenges that threatened that city’s firefighter pension plan a few years ago.

For Smith, the solutions to saving and fixing arguably the nation’s worst government-run pension fund are not political. Rather, they involve doing the math and abiding by Kentucky’s Constitution and its statutes.

He strongly believes that decades spent ignoring Kentucky law requiring actuarial analyses of proposed benefits and benefit enhancements before they’re granted to employees or retirees has been a primary contributor to the decline of the state workers’ retirement fund – from being 74 percent funded a decade ago to currently containing only about 17 percent of the funding needed to cover future retirement benefits.

KRS bureaucrats want you to believe that the major contributor to Kentucky’s pension crisis is underfunding by the legislature and – as they occasionally admit – unproductive investments.

They vehemently oppose Smith’s appointment by Gov. Bevin to their board because the doctor’s made it known that the malady is the result of overspending in the form of enhancing benefits beyond available funding or a strategy to develop one beyond the biennial budgetary shakedowns of the General Assembly.

When it comes to enhancing benefits, for instance, the potential purchaser of a house or car must demonstrate he’s got funding – either in terms of up-front cash or the ability to make payments – before he’s allowed to move in or drive off the lot.

Smith posits the system is unsound because its leadership has performed like a buyer who purchases a house he can’t afford then goes to his employer and demands a raise because he’s “underfunded.”

This seems the model of choice for too many Frankfort politicians, who’ve offered new and increased benefits without either the funding or the required actuarial analysis. Instead, they just add the benefits’ increased costs to the funding to the state’s annual Actuarially Required Contribution (ARC). Then, when Frankfort doesn’t meet that obligation, detractors claim the system is underfunded.

It’s appalling that William Thielen, the retirement system’s overpaid and ineffective executive director, dismisses the statutorial requirement for solid analysis of what benefits cost before they’re granted as no longer acceptable.

I sat on the second row at the most recent meeting of the state’s Public Pension Oversight Board during which Sen. Jimmy Higdon, R-Lebanon, tried to impress upon Thielen that the legislature can no longer vote for benefit enhancements without at least an estimate regarding their future costs.

Thielen claimed such costs are “indeterminable.”


He knows that Smith, once he’s seated, will ask the questions, do the math and figure out what’s really going on in that huge retirement system.

No wonder Thielen obsessively opposes Smith’s appointment to the board to whom he answers.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at


Bluegrass Beacon – Detangling hair-braiding rules: Detour averted

BluegrassBeaconLogoAlong with his recently created “Selfie of the Week” contest, Gov. Matt Bevin’s Facebook page includes a video of the commonwealth’s 62nd governor going where most Kentuckians have never ventured – up to that little round enclosure at the Capitol’s pinnacle above the dome.

Bevin and his kids celebrated Spring Break by climbing myriad groups of stairs to get a bird’s eye view of Frankfort.

His video shows not only how small objects on the ground outside the Capitol seem but also offers a real perspective on how much smaller the floor of the rotunda under that dome appears from 200 feet high versus how it feels when you’re standing in that same spot surrounded by multitudes of self-serving politicians with an overinflated view of their own importance.

Perhaps the governor will consider climbing those steps again and inviting some of his fellow Kentucky politicians who’ve lost sight of why they were sent to Frankfort in the first place to tag along.

Rep. Hubert Collins, D-Wittensville, would be a good candidate for such a climb.

Collins, who’s occupied space in the General Assembly for more than a quarter-century, tried during this year’s legislative session to wreck a bill filed by fellow Democrat and state Sen. Perry Clark from Louisville detangling the commonwealth’s onerous regulations of natural hair braiding.

Bevin eventually signed the bill after it was passed by the legislature, but not before Collins did his best to replace the now-former obstacles of entry into what’s known as the “African style” hair-braiding industry with new, equally thick regulatory barricades that shut out entrepreneurs wanting to open businesses providing this service.

The level of irrationality imposed by both the former regulations and Collins’ replacement amendment reach even higher than those “walls.”

Kentucky law previously required natural hair braiders to spend 1,800 hours and thousands of dollars – anywhere from around $5,000 at the Paducah Beauty School to nearly $20,000 at the Empire Beauty School locations in Elizabethtown and Louisville – just to obtain the required license, even though the practice is totally natural and includes no dyes or chemicals.

“To add insult to injury, this training never even breaches into the braiding areas,” Clark said.

Yet after his fellow legislators voted to tear down these barriers, Collins proposed a floor amendment with several new requirements, including a $1,500 fee, which would trip up the dreams of immigrants – many from West Africa – who came to America legally and are willing to work their fingers to the bone while building a new life.

This nonsense of replacing one set of onerous regulations with another reminds me of British Prime Minister Winston Churchill’s quip: “I may be drunk, Miss, but in the morning, I will be sober and you will still be ugly.”

What’s really ugly – no matter the angle from which it’s viewed – is that Collins’ amendment would have sent the $1,500 fee straight to the Kentucky Board of Hairdressers and Cosmetologists, which is chaired by none other than the lawmaker’s wife, Bea Collins.

Amazingly, even Rep. Reginald Meeks – also a Louisville Democrat who normally floats around in the outer reaches of the political sphere’s leftist regions – labeled Collins’ amendment “anti-business.”

He could have added “corrupt,” as well.

If Hubert and Bea Collins would ascend those stairs and glance back down when they reach the top, they would see what state government as enshrined in the Kentucky Constitution was meant to be: a miniscule part of our lives that serves its constituents, protects their liberties, provides a level playing field and removes barriers that prevent citizens from freely climbing as high as their dreams, dedication, abilities, hard work and destinies take them.

When that truly happens in Frankfort, watch Kentucky rise higher and go where it’s never gone before.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at

Bluegrass Beacon – Needed: A budget process that’s ‘for the people’

BluegrassBeaconLogoIf you don’t believe satirical journalist P.J. O’Rourke’s quip that “giving money and power to government is like giving whiskey and car keys to teenage boys,” pay attention to what’s happening in Frankfort and Washington.

Better yet, try taking some of that money away or at least making politicians more accountable for how they spend it.

Be prepared for the incessant whining and excuse-making sure to follow your demand that they live within their current means, work harder, pay debts, prioritize spending and save for rainy days – just like responsible Kentucky families must do.

For years, fiscally sane Kentuckians have been astonished by the absolute defiance on display in Frankfort toward the right spending decisions or even just some restraint, especially in challenging times.

They must really be amazed at the approach taken regarding the new budget by House Speaker Greg Stumbo, a Prestonsburg Democrat, who moonlights as an ambulance chaser for a personal injury law firm marketing itself as “”

Stumbo’s been willing, for example, to hold up the commonwealth’s entire budget in order to force inclusion of free community college tuition for all Kentucky high-school graduates, despite the fact that more monies must be found to address the nation’s worst – and further worsening – public-retirement system.

Reasonable Kentuckians must also be amazed that as this column is released, the legislative session is in its final throes and still no budget’s been passed.

Lawmakers have found time to file some 940 other bills, including legislation requiring men to be married and receive approval from their wives before using Viagra and banning teens under the age of 18 from using tanning beds.

Yet the Speaker, as head of the majority party in the state House, has utterly failed to provide the leadership required to get House Bill 303 – the budget – passed and thus fulfill the House’s singular constitutional duty.

Even if some kind of spending plan gets approved by the time you read this, the process remains a frustrating failure and needs an overhaul built around accountability and transparency.

The Frankfort press corps – eager for drama and pitting sides against each other while being inexperienced at covering a conservative, decisive governor – drives a narrative that presents all spending plans as equal.

Plus, statehouse reporters frequently, if unwittingly, cover these final budget spasms in ways that portray political leaders sympathetically as really working hard “for the people,” willing even to eat take-out and burn the midnight oil in order to meet the constitutionally determined April 15 deadline for making final decisions about how to spend the $22 billion we taxpayers will be forced to give them during the next biennium.

Puh-leeze. They’ve had months to get this work done and have failed.

Gov. Matt Bevin, despite being brand new to the process and having just won an election weeks earlier, met his constitutional responsibility to present the executive branch’s budget proposal during the General Assembly’s opening days.

Bevin’s two-year spending plan calls for 9 percent cuts to most state-government agencies and programs, including universities.

Stumbo distorts the governor’s intentions, claiming Bevin wants to harm education simply because he challenged university presidents to find inefficiencies and tighten their collective belts as several already have. Controlling spending is absolutely necessary if our commonwealth is to start down the long road toward saving our public-pension funds and tucking money away to address future pension needs so we don’t repeat our retirement systems’ messy history.

Stumbo’s garbling is like big-spending politicians in Washington labeling Kentucky Sen. Rand Paul “weak on national defense” because he wants the military to quit spending $640 for new toilet seats and put the money toward paying down the national debt.

Such demagoguery – whether during a debate about national defense in Washington or an austere budget in Frankfort – is many things: a time-buster, resource-waster and confidence-diminisher.

“For the people” it’s not.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at

Bluegrass Beacon: House GOP shows solidarity, challenges the status quo

BluegrassBeaconLogoEditor’s note: This column originally was released to newspapers before the state Senate had passed its budget. It’s been updated to reflect passage of the Senate’s budget.

How unfair it was for former Gov. Steve Beshear to claim he was leaving the commonwealth’s bank account in much-better shape than he was handed when, in reality, the incoming Gov. Matt Bevin administration found itself staring at a shortfall of hundreds of millions of dollars.

This scenario resulted in the new governor’s first budget proposal containing across-the-board spending cuts of 4.5 percent during the current fiscal year and 9 percent in the next budget.

Bevin’s budget pays the bills, adds an additional $1.1 billion in funding to the pension system and tucks away nearly $1 billion in savings to address future pension payments in a Kentucky Permanent Fund – $500 million of which is coming from surplus funding in the state’s public employee health insurance fund.

State retirees, despite being largely a Democratic party constituency in elections, have given an increasingly enthusiastic “thumbs up” to Republican Bevin’s plan.

But the House Democrats’ budget dramatically reduces Bevin’s proposed cuts and uses the $500 million in surplus health insurance funding to pour more money into the commonwealth’s Kentucky Teachers’ Retirement System rather than save it for the future or at least put it toward the Kentucky Employees Retirement System (KERS), which is in much-greater danger of going belly-up.

The difference is KERS can’t match the campaign-contributing ability of teachers’ unions.

Still, it’s not as if Bevin neglected the teachers’ fund, as evidenced by his proposal to pour an additional $660 million into the KTRS pension plan.

Even some of the governor’s supporters question the need to save when there are pressing funding needs.

But it’s like the family being able to pay for a repair if the car breaks down or someone has to make an unexpected trip to the emergency room without totally busting its budget.

The state has itself taken a few such “trips” recently, including a shockingly high bill from Kynect, Kentucky’s Obamacare-style health insurance exchange. The tab was more than $60 million for this duplicative and wasteful program despite the fact that Beshear claimed his administration would operate Kynect for less than $34 million.

There’s also the matter of finding revenues to cover Kentucky’s portion of the bill generated by Beshear’s unilateral expansion of Medicaid eligibility, resulting in a half-million Kentuckians being added to the taxpayer-funded health insurance program. Kentucky Medicaid now includes 400,000 enrollees with household incomes between 69 percent and 138 percent of the federal poverty level – many of whom could purchase private insurance if they weren’t being encouraged to move to the government dole.

Part of Obamacare’s promise was to cover a major portion of the expanded Medicaid costs now and into the foreseeable future. Still, even the best scenario requires Kentucky to pick up 10 percent of the expansion’s cost by 2020.

So the Democrats pass a budget that keeps most of the spending but refuses to tuck away badly needed savings, even though they have no clue what that cost will be.

What if it’s a lot higher and requires taking more General Fund money to pay those bills?

House Republicans showed inspiring solidarity by refusing to go along with this nonsense. Surely, this strengthened the resolve of the state Senate, which has since restored many of Bevin’s cuts and savings.

Not a single one of the House’s 47 Republicans voted for the Democrats’ irresponsible spending plan, which is dead on arrival at the Republican-controlled Senate.

The GOP’s unity is especially satisfying and significant as it’s directed at arch enemies of changing the direction of our commonwealth from poverty to prosperity: outdated political relics in charge of the House’s majority party who refuse to cut spending, save for the future or even represent their own constituencies.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at

Bluegrass Beacon – ‘Just Say No’: Good for campaigning, bad for governing

BluegrassBeaconLogoEditor’s note: This column originally was released to newspapers before Wednesday’s budget vote in which the House GOP refused in unanimous solidarity to support the Democratic leadership’s plan to undo Gov. Bevin’s proposed spending cuts and Rainy Day fund increases.

The voters have spoken.

They want politically divided state government for at least the remainder of this year, which includes the critical final weeks of the current General Assembly’s budget session.

With Democrats winning three of four seats in the recent special elections, the party of President Barack Obama and House Speaker Greg Stumbo scored a small net increase over the political control it held before November’s election.

Democrat Jeff Taylor’s 18-point victory over Republican Roller Dome Fun Plex owner Walker Thomas in the 8th District race to replace Democrat John Tilley, who Gov. Matt Bevin chose to head the justice cabinet, is one of the reasons the special elections for the most part belonged to Dems.

Taylor got help from the White House in the form of robo-calls. Good for him! How many state lawmakers can lay claim to getting help from the President in their campaigns?

A more important question is: what now?

Will House Democratic leaders finally meet the supersized multitasking demands incumbent upon them – of working with a Republican Senate and governor to pass a responsible two-year $22 billion budget while also addressing the nation’s worst state public-pension crisis without raising taxes, cutting spending, raiding the commonwealth’s “Rainy Day” fund – which Bevin proposed increasing – or plunging the commonwealth deeper in debt?

“Just Say No,” the well-known mantra created by the former First Lady Nancy Reagan, who recently died, might work in campaigns for political office and against some illegal drugs, but it’s an intolerable substitute for the tough slog of governing.

It certainly does nothing to persuade state workers and retirees that meaningful action is planned to ensure the continued solvency of the Kentucky Employees Retirement System, which now is barely 17-percent funded.

If Stumbo hinders the budget process from moving forward simply because he wants to deny Bevin some kind of political victory, Democrats will only be able to testify on the campaign trail: “We opposed Bevin and his ideas. We stood in the way of badly needed reforms to our education, health care and pension systems because we didn’t want the Republican governor to notch a win. We opposed Bevin. We have no earthly idea how we’re going to pay for the commonwealth’s huge Medicaid expansion, but we protected the status quo – and we opposed Bevin.”

Such an approach is downright unacceptable to reasonable Kentuckians who tolerate a certain amount of political shenanigans on the campaign trail but firmly reject governing platforms built around obstructionism.

I wonder if the President might be willing to make another round of robo-calls to remind Stumbo and the Democrats: it’s not enough to simply oppose the governor’s approach on the budget; they have a constitutional duty to present their own ideas.

But if these House leaders attempt to take the easy way out by proposing a plan that taxes, spends or borrows more to fix Kentucky’s budget situation, the governor should keep the promise he firmly laid down in his budget speech by finding the fattest, inkiest veto pen available and using it.

The temptation for House Republicans, meanwhile, will be to alternatively wring – and then sit on – their hands, claiming: “there’s little we can do since we aren’t the majority party.”

Instead, this is the time for GOP House leaders to pump up the volume of their bully pulpit’s boom box and constantly – and very loudly and publicly – push and prod the majority party by forcing, demanding and remaining unyielding in their insistence that the entire House get serious about doing the people’s work.

Divided government – currently the political makeup of 19 states’ governments – can work when both parties commit to creating an environment in which all participants feel the burden of governing responsibly and have a stake in getting things – primarily passage of a responsible budget – done.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at