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Texas successfully approved a two year budget.  However, many are questioning how successful this budget actually is.  Like any other state, Texas is experiencing its fair share of budget shortfalls.  The budget largely "succeeds" through making massive cuts to public education and health care programs.  Some examples being that the budget underfunds schools by almost $8 billion and underfunds Medicaid by almost $4 billion.  This method of reducing the deficit might foreshadow a lot of what the Republican proposal on the federal budget is likely to do.

While this budget may attain its goal of staying within the spending limits of the state, it does so in very scary ways, to say the least.  Representative Helen Giddings (D-Desoto) points out, "I believe we will rue the day that we took many of the actions we took in House Bill 1 and we will feel the ill effects of the dismantling of our infrastructure, I believe, for years to come."

Giddings points out an important question that many Americans need to ask themselves: At what cost are we making these reforms?  Of course, it is important to control spending, however this budget specifically targets public education among the larger of the budget cuts.  In a time where many of our problems are becoming worse as a result of the lack of any solution or moreover any idea of a solution, it seems counterintuitive to be decreasing funds to public education, the institution that provides the hope for the future's great reformers.

Furthermore, last month a non-partisan Legislative Budget Board found that the state would lose 335,000 jobs if the proposal became law.  It is very scary to say the least, that the budget not only cuts education (thus making long-term success look grim) but also doesn't provide any boost to short term economic gains.

It is going to be a major issue, as the states and the federal government start to unveil budget proposals, regarding what needs to be cut.  Of course, we have successfully identified the problem: We are spending too much.  However, the identification of the solution has proved and will continue to prove to be extremely difficult.  Nevertheless, it is certain that there will be cuts, there will be reforms, and hopefully, there will be solutions.

SOURCE: Bloomberg Businessweek