Alaska Has Three "A's" Its Name and Now, So Does Its Credit Rating

At Conservatives4Palin, Stacy Drake wrote a piece last summer following our nation's credit downgrade indicating how the fiscal environment of Alaska was stable enough to allow Moody's (one of the three main credit ranking agencies) to upgrade Alaska's credit rating in November of 2010. Today, another credit rating agency, Standard and Poor's upgraded Alaska's credit rating to its highest possible rating of AAA. The agency gives several reasons why it felt confident enough in Alaska's fiscal climate to make such an upgrade. A few of these reasons are due directly to the policies implemented by Governor Palin:

*The state's strong financial management and generally conservative forecasting 

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*The state's financial flexibility, enhanced by the maintenance of large reserves derived from windfall oil revenues since fiscal year 2008 

*The state's moderate debt burden 

*An accumulation of multiple budget reserves equal to more than 200 percent of the general fund budget 

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*Extensive forward‐funding of significant areas of the state's operating budget, a practice that could be halted in an underperforming revenue environment 

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* The aggressive steps the state has taken to reform its pension and retirement systems, which will limit the accumulation of new liabilities

The state's strong financial management and generally conservative forecasting:


Governor Parnell has largely been a fiscal conservative during his time as Governor so far, but indeed Governor paved the way by cutting budgets by nearly 10% and reducing earmark requests by more than 80%. This is "strong financial management


The state's financial flexibility, enhanced by the maintenance of large reserves derived from windfall oil revenues since fiscal year 2008:

One of Governor Palin's signature pieces of legislation was ACES--Alaska's Clear and Equitable Share--which revamped the corruption tainted oil tax legislation of the Murkowski administration and was implemented during fiscal year 2008. While it is a misnomer to characterize such revenues as "windfall", they have provided financial stability to the state. As Alaska's state constitution notes that the people own the natural resources, so such a tax is better classified as a severance or production tax paid by the oil company as a recompense for extracting the irreplaceable citizen-owned state resource. Nonetheless, the changes to the oil tax structure has increased the revenues that the state has brought in, while at the same time providing record number of oil jobs and oil companies investing in the state.

The state's moderate debt burden: 

During her time as Governor, the debt of Alaska increased at a much slower rate than all of the governors currently seeking the GOP nomination for president and a the debt was actually lower than under her predecessor's administration.


An accumulation of multiple budget reserves equal to more than 200 percent of the general fund budget:


Due to legislation like ACES and the frugal budgeting of Governors Palin and Parnell, Alaska now has a 12 billion dollars in savings. During the VP campaign, Governor Palin was able to tout a more than $5 billion surplus.  While many states are wallowing in budget deficits, Alaska is facing just the opposite. 


Extensive forward‐funding of significant areas of the state's operating budget, a practice that could be halted in an underperforming revenue environment  


One of Governor Palin's key items when she ran for office was forward funding of education using the budget surplus, which she implemented to the tune of a billion dollar early in her term, and this is a practice that Governor Parnell has continued. This kind of budgetary practice not only enables schools to be able to have flexibility and foreknowledge of their fiscal situation, it also provided the stability to fiscal future of the state, as roughly 10% of the state's budget is devoted to education. 


The aggressive steps the state has taken to reform its pension and retirement systems, which will limit the accumulation of new liabilities:

During her tenure, Governor Palin reformed pension and retirement systems, which lead to a reduction in liabilities of 34.6% during her tenure. Governor Palin noted in a Facebook post over a year ago that her pension reforms and other fiscally prudent measures have contributed to Alaska's fiscal health:

My home state made the switch from defined benefits to a defined contribution system, and as governor, I introduced a number of measures to build on that successful transition, while also addressing the issue of the remaining funding shortfall by prioritizing budgets to wrap our financial arms around this too-long ignored debt problem. When my state ran a surplus because we incentivized businesses, I didn’t spend it on fun and glamorous pet projects for lawmakers – though that would have made me quite popular with the earmark crowd. In fact, I vetoed more excessive spending than any governor in our state’s history, and I used the state’s surplus to bring our financial house in order by paying down our unfunded pension plans that some other governors wanted to ignore. This fiscal prudence didn’t make me popular with the state legislature. In addition to vetoing hundreds of millions of dollars in wasteful spending, I put billions of dollars into savings accounts for future rainy days, much like most American families do in responsibly planning for the future. I also enacted a hiring freeze and brought the education budget under control through a commitment to forward-funding. I returned much of the surplus back to the people (it was their money to start with!) through tax relief and energy rebates. I had proven as the mayor of the fastest growing city in the state that tax cuts incentivize business growth, and though the state legislature overrode some of my veto cuts and thwarted an additional tax relief request of mine, the public was supportive of efforts to rein in its government.

This bodes well for Alaska's fiscal health, especially when many states are swimming in debt and unreformed pension programs (my state of Illinois now has the worst credit rating in the country). It also provides another feather in Governor Palin's cap which provides continued vindication regarding her wisdom, intellect, political foresight and boldness.Should she seek elected office again in the future, she'll indeed have much to point to in the way of leadership and fiscal prudence. 


 Crossposted here and here.

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.

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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.

Crossposted here, here, and here.

Projection, Class Warfare, the Left and Governor Palin

A vile, depraved post on Leftist blog regarding Trig Palin's recent birthday was rightfully lambasted throughout the conservative blogosphere yesterday from Gateway Pundit to Big Journalism and beyond (even the liberal Mediaite). Blog postings, in addition to tweets, led to a massive new media effort, #trigscrew, to call advertisers at this Leftist blog to remove their ads. Due to a blast of tweets alerting them to their product being advertised on the Leftist blog, several companies have indeed lifted their advertising. It has revealed the Left for who they are, and it's all the more sweet that the fusion of the free market and social media has made such an impact on the Left's transparent agenda.

The Left claims to be for the proverbial little guy, butobviously not when it is this little guy. They are not only ideologically progressive, they are also projectionists-- attacking conservatives for what they themselves are exhibiting. Actions speak louder than words, so the saying goes, but for many of these projectionists, they only have words. Such is the case here. However, this misplaced projection and false accusations extend beyond the Left-to-Right blogosphere. Politicians on the Left and progressive pundits have accused Governor Palin of being a puppet for big corporation--and have played the class warfare card. Progressives should learn from history (even from across the Pond) about what happens when you play the class warfare card with a strong conservative woman:

In her Madison Tea Party rally speech on Saturday, Governor Palin called out the Left for engaging in "class warfare and fearmongering":

And when Wisconsin’s own Paul Ryan presented a plan for fiscal reform, what was Obama’s response? He demonized the voices of responsibility with class warfare and with fearmongering. And I say personally to our president: Hey, parent to parent, Barack Obama, for shame for you to suggest that the heart of the commonsense conservative movement would do anything to harm our esteemed elders, to harm our children with Down syndrome, to harm those most in need. No, see, in our book, you prioritize appropriately and those who need the help will get the help. The only way we do that is to be wise and prudent and to budget according to the right priorities.

These are the words of a woman whose actions have matched her words. As Governor, Palin budgeted wisely, prudently,and according to the right priorities.Her prudent budgeting has been well documented. She vetoed hundreds of millions of dollars in unneeded spending, rejected stimulus funding that would not be effective in Alaska's climate, and removed duplicated federal/state funding from her budgets. At the same time, Governor Palin's tenure included implementing a Senior Benefits program for low income elders. She also increased funding for students with disabilities in rural schools and increased funding for special needs education. Overall, she increased special needs funding by 175%. The very things that Governor Palin called for are the very things that she has done during her political career. She prioritized and budgeted accordingly.

Meanwhile,the Obama administration's health care "reform" legislation disallows families from using flexible spending accounts (which is the family's own money) for special needs education. He also employs a health care adviser who believes in that health care should be distributed by their "productivity in society" and their "potential to live a complete life". Additionally, President Obama and the liberals in Washington D.C. support spending money that we don't have to fund Planned Parenthood and the abortion industry, ignoring the fact Planned Parenthood turned a more than billion profit as a non-profit entity in 2008. Governor Palin, of course, is opposed to such funding stating in part:

We recognize that not only is our country buried under Mt. McKinley-sized debt, but that the truest measure of any society is how it treats those who are least able to defend and speak for themselves.

What does this say about our society? The Left uses Trig Palin as a prop for their hatred of Governor Palin, while wrongly accusing Governor Palin of using Trig as a political prop. They try to fear monger and accuse conservatives of destroying entitlement programs, when it is their mindsets that contribute to policies supportive of rationing of care by panels like Independent Payment Advisory Board that affects Medicare reimbursement and treatment. They accuse conservatives of not caring for the elderly and those with special needs, when it's their rhetoric and policies that are uncaring.They are progressive projectionists. I think I'll stick with the ideas and character of the woman not only has her political rhetoric match her policies, but who also had the courage and compassion to do something 90% of mothers in her situation don't do.

Crossposted here, here, and here.