Fiscal Politics
Sen. Susan Bartlett of Hyde Park, Chair of the Appropriations Committee (and, as of yesterday, a semi-officially declared candidate for governor) thinks the state budget approved Tuesday over Gov. Jim Douglas’s veto offers “a pretty good road-map” for Vermont’s fiscal future.
Douglas thinks it provides a political weapon to use against the Democrats.
So the Democrats are high-minded public officials and Douglas is a conniving cynic?
Sen. Bartlett
Not a bit. Both parties will use the budget in next year’s campaign. Why shouldn’t they? Those were real differences about how to govern the state that came out during the budget battle. They should be part of the campaign.
Besides, doing the old, “aren’t we high-minded?’ act is pretty cynical itself, and much more likely to be employed by the winners. After you’ve knocked the other guy down, it’s bad form to kick him as he lies on the floor. So the winners tend to talk policy while the losers plan revenge.
Still, those were the first responses to Tuesday’s events. Bartlett and other Democrats talked about how they had put the state on a solid fiscal footing for the future, and perhaps laid the groundwork for some fundamental compromises on even the stickiest issues, such as holding down the cost of public education.
Douglas warned that “each and every Democrat…made the difference” in this “party-line vote.” Vermonters, he said, will “remember that next year.” He clearly plans to keep reminding them.
Whether that recollection will hurt or help the Democrats remains unknown. What can be projected with some confidence is that the political impact, if any, will depend more on what really happens in the economy than in the rhetoric of either side.
But there has been a disconnect between reality and rhetoric throughout this process. The differences between the two parties are real; they are not as polarized as the sound bites indicate.
Thus the Democrats assailed Douglas for the “devastating,” or “drastic” or “really brutal” cuts he proposed in social programs, cuts that would harm “the most vulnerable” people in the state.
They would have. But so will the $80 million in cuts in the budget the Democrats passed. That’s on top of $67 million in budget reductions for Fiscal Year 2009, ending June 30, earlier agreed to by the Democratic majority. The Democrats cut less than Duglas wanted. But cut they did.
Not all the Democrats ignored this reality. “Some Vermonters will lose some of their services,” said Rep. Martha Heath of Westford, the chair of the Appropriations Committee.
A few Democrats actually took their own party to task. Rep. Mike Fisher of Lincoln, a social worker in Middlebury, described one of his cases – a young man of about 20 who is mentally impaired, not at all malicious, but as sexually fixated as any man his age, and therefore a “public safety risk.” Because of budget cuts – cuts approved by the Democrats – there may not be enough money to treat the young man properly.
“We have compromised enough,” Fisher said.
None of this has stopped many Democrats from trying to paint Douglas as a heartless ogre, themselves as the protectors of the poor and helpless.
Meanwhile, the Governor seemed to wonder how , with state revenue actually falling, with “Vermonters cutting back” because of the recession, the Democrats could be so foolish as to raise taxes and to spend more money next year than in the year now ending.
But:
–First, Douglas did not propose actually spending less money next year than this year. And he agreed to tax hikes. He, too, ended up calling for spending more and taxing more. Not as much more as the Democrats. But the differences were not immense. In fact, were it not for the Governor’s insistence on pressuring the schools to make deep spending cuts next year, the two sides probably could have cut a deal;
Second, the Democratic budget actually spends less money raised from Vermont taxpayers – five percent less, said Rep. Floyd Nease of Johnson – than the state is spending this fiscal year. It’s the $175 million in federal stimulus money that makes the total higher. Douglas wanted to spend less of the stimulus this year, more in the future, which may have been a good idea. But, again, the two sides were not that far apart ,either conceptually or fiscally;
–Third, what is all this talk about Vermonters ‘tightening their belts,’ or ‘cutting back’? Dismissing the human costs of the recession would be cruel, and – worse – ignorant. But most people in this state and the other 49 are not unemployed. Most are working, got pay raises, and spending as much as they did last year, if not more. Taking advantage of low prices, too. This is a good time to buy a house (though not to sell one) or a car. In a recession, misery is selective. Aggregate demand is down because those who are directly affected are buying as little as possible. Everyone else is just fine;
–Finally, governments are not individuals and should not act as if they are. Most economists say that in a deep recession like this one, governments should spend more to make up for the fact that firms and individuals are spending less. As Rep. David Zuckerman, a Burlington Progressive put it, that is “the true purpose of the (federal) stimulus.” Whether or not most people actually are “tightening their belts,” this is probably not the time for governments to follow their example.
That’s better economics but a harder political argument than the Republican mantra that government should spend less. And Douglas sent a clear signal that he will rely on Republican political mantra. When asked for one example of a policy difference between himself and the Democrats, he said Democrats believe that even after five years, a person who is not trying to find work should “keep getting welfare benefits.”
“I don’t,” he said.
That is a difference between the parties, and there is something to be said for Douglas’s side of the argument.
But it wouldn’t save much money. Most of the roughly 5,300 people in the state’s “Reach Up” program are working or in training (and most of those who are not have been excused for medical reasons, according to a Department report), and few stay dependant for five years. Even if a few single women with small children (most of the cases) were dropped, other expenses would neutralize the savings. Vermont is not going to allow children to starve, no matter how irresponsible their mothers may have been. One way or another, taking care of those kids would probably cost about as much as cutting their mothers off welfare would save.
It’s hard to believe that Jim Douglas, an experienced government policy wonk, doesn’t know that. But being tough on welfare has always been good politics.
Maybe it still is. But maybe not. Nationally, the new tone set by the new president is to forget about old disputes and just try to solve the problems. Douglas’s initial response after the veto over-ride was to continue the old dispute, repeating his arguments about the flaws in the Democratic budget. That was an understandable first reaction. Keeping it up could be perilous to one’s political health.
NOTE: The math dispute seems to have been settled. Read the comments on yesterday’s post, plus this observation sent by private e-mail: “/0 approaches infinity, but never gets there. But, who cares?”
Obviously all increases from zero are infinite; one finds percentages by multiplying, and multiplying anything by zero produces the answer of zero). Still, going from zero to 531 is a big increase. One, though, that should not have been expressed in percentage terms.
Now here’s the kicker: Vermont didn’t go from zero millionaires in 200 to 531 in 2007. Tax Commissioner Tom Pelham emails that the Department just didn’t have a category higher than $500,000-and-up earners in 2000, “but certainly in the 829 returns in this cohort, there are millionaires. A lot of money was being made back then in dot.com investments, etc. It was one of our higher capital gains years.
But the point holds. The number of Vermont households reporting more than $500,000 in income (roughly the top one half of one percent of the earners) rose from 829 to 1,571, an increase of almost 90 percent.
Tags: Jim Douglas, Susan Bartlett
