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Kudlow explained that he was working on a column and wanted the help of Peter, an old friend of Kudlow from the Reagan administration.
Listen to or download Peter’s spot on Kudlow on the MP3 player below, but here’s a quick synopsis:
KUDLOW: “Do these guys [in the Obama administration], as I suspect, really see the expansion of welfare as a vote-buying exercise?”
FERRARA: In short, “yes.” The federal government spent $1 trillion on welfare this year, a new record, and welfare spending is “rocketing upward.” Peter notes that part of the federal budget goes toward advertisements and other outreach to get more people on welfare.
KUDLOW: “That’s key, that’s really an important point.”
FERRARA: We should be sending welfare money back to the states as block grants, as we did for one part of welfare AFDC in the 1996 reform. There are more than 200 means-tested welfare programs and every one of them should be sent back to the states via block grants so costs can come down.
KUDLOW: Now it’s reversed. The states spend more and leverage it for more state spending.
FERRARA: That is correct.
KUDLOW: If there is a second term of Obama, he’s going to raise taxes to continue to expand these means-tested welfare programs. And the means-testing — for Medicaid, for instance — has been expanded to make it a middle-class entitlement.
FERRARA: That is correct, and Peter explains how that is so — and how Obama (in a second term) wants to let the Bush tax cuts expire for everyone, not just the wealthy, so tax revenues rise for the purpose of redistribution.
KUDLOW: Do we have a VAT (progressive value-added tax) on the horizon?
FERRARA: Yes. That will be on the table. Pelosi has already called for that. The problem is spending, not how much we are taxed. Spending as a percentage of GDP is skyrocketing under Obama, “And the only place to get the money to fund that is from the middle class.”
KUDLOW: “Peter Ferrara … no one says it better than you do.”