Republicans aren’t buying Gov. Phil Murphy’s big push for “baby bonds.”
A number of high-ranking Republicans unleashed on the governor’s proposal to give deposit $1,000 into bank accounts belonging to children born to families making less than about $131,000 next year, alternatively calling it an irresponsible use of the state’s limited funds and deriding it as a political ploy to win Murphy a second term in 2021.
“I’m not sure that Governor Murphy ever looks at both sides of the balance sheet,” Assembly Minority Leader Jon Bramnick said (R-Westfield). “He has to borrow $80 million to fund this ‘free money’ giveaway plan. Adding extra costs for programs like baby bonds at a time of fiscal crisis is irresponsible. The governor just went a little too far on this one.”
Murphy’s proposal is a version of a bill U.S. Sen. Cory Booker is pushing on a federal level, though that bill mandates additional annual payments past the initial deposit and is tiered based on a family’s income.
Booker’s plan could net children as much as $46,215 or as little as $1,681 depending on their family’s income.
The governor’s plan would likely generate far smaller returns. The $1,000 deposits Murphy is calling for would be invested to generate returns that are at least equal to 30-year bonds issued by the U.S. Treasury.
Assuming an interest rate of 1.43%, Wednesday’s rate for 30-year bonds, the accounts would hold about $1,291 after 18 years.
“At a time when Governor Murphy is borrowing $4 billion, raising taxes on gasoline, tolls and income, he wants to give $1000 to every child born in 2021 — his election year! Governor Murphy’s Baby Bill scheme will cost nearly $16 billion to fully fund,” Republican State Chairman Doug Steinhardt said, referring to the total cost of the borrowing bill.”
“Meanwhile, too many New Jerseyans can’t find jobs, can’t get unemployment benefits, can’t open their businesses and can’t feed their families,” he said. “If the Governor wants to address the wealth gap, he should start by making New Jersey affordable for those who live and work here now.”
Republicans have opposed the mechanism that allows the state to borrow to plug budget holes created by COVID-19 since its inception. They even launched a suit to strike the law, though the New Jersey Supreme Court sided with the Murphy administration in that case.
Some Republicans are even claiming the administration is intentionally borrowing too much in a bid to ensure the governor does not seek tax hikes during next year’s budget.
“Let’s be perfectly clear: not one dime of the billions Murphy will borrow has anything to do with addressing COVID-19 related needs,” State Sen. Mike Testa (R-Vineland) said. “It has to do with squirreling away money for next year’s budget so he can play Santa Claus as he runs for reelection.”