Posts Tagged ‘Welfare’

Who’s a Grownup?

Thursday, May 21st, 2009

Now that the two (somewhat) detailed budget documents are public, a couple of conclusions are possible, a couple of questions are irresistible.

First conclusion: The big difference between the Legislature’s Fiscal Year 2010 budget and the alternative that Gov. Jim Douglas put forth Tuesday afternoon is not the money. The Douglas Administration wants to spend some $24 million less than the $4.5 billion in the budget passed by the Democratic-controlled Legislature, and raise taxes by $13 million less than the Democrats would.

(Or so it seems. The 25-page “Alternative Approach to FY 2010 Budget” released by Douglas’s office was long on rhetoric, short on statistics, with no total tax or spending figures)

But even if the figures above are a little off, the money difference is not all that big. Were this squabble really about the money, it could easily be resolved.

First question: So what is the big difference?

You could say it’s ideological except there are no real ideologues involved. Maybe Susan Bartlett, the Lamoille Democrat who chairs the Senate Finance Committee, came closest when she said the two sides were divided by “a fundamental, philosophical difference.”

That’s sort of like ideology, but with boundaries.

The boundaries don’t render the “philosophical differences” meaningless. They are substantive, as will be examined just below. But they are not polar. Douglas does not intend to grind the faces of the poor into the dirt any more than the Democrats are trying to socialize Vermont. Partisans on both sides may argue that this is exactly what the other guys really want. The grownups among us need pay them no mind.

Ah, grownups. The very mention of adulthood leads inexorably to our second question: Does the word describe our leaders?

The question applies to the leaders of both parties, but today especially to Douglas and his minions. Start with James Reardon, the commissioner of finance and management. One of  Douglas’s ideas for lower spending is to reduce state Medicaid payments to doctors and hospitals. When Democrats pointed out that the doctors and hospitals would simply charge more to treat other patients, thereby raising health insurance premiums, Reardon said,” it is very possible (health care) providers have the ability to reduce costs.”

Almost anything is possible. Stretching matters a bit, perhaps almost anything is “very possible.” But Reardon appears unaware that hope is not a plan. A responsible (or grown up as it is sometimes known) public official does not base policy on hope, or on a “possibility” that someone else will do the hard work.

Hope is part of the Democratic plan, too, specifically the hope that a second round of federal stimulus next year will fill the projected gap in the Fiscal Year 2011 budget. This gap could be as much as $67 million, though like all such projections ,the precision of this one is open to question.

As it happens, the Democratic hope does not seem forlorn. Word down in Washington is that another federal stimulus next year is more likely than not. Still, it would be nice if the Democratic leaders at least showed some candor – or even some interest – in discussing the possible long-range deficits that might result from their spending plans.

Most of the debate until June 2, when the Legislature is to reconvene , is likely to be on the short-range impacts of the budget alternatives, and the debate could be challenging for the grownups. That’s because the rhetoric is likely to get more intense and more personal, blurring that distinction between “fundamental, philosophical difference” and ideological extremism.

But the distinction is more real than the rhetoric. The Democrats are not out to expand Vermont’s version of the regulated welfare state, merely to preserve it. And Douglas does not want to unravel it, merely restrain it.

Here, on another level, the difference is money. Not money in a big batch, as in the total amount in the budget, but money in (comparatively) small amounts, as in who gets and who gives. It is, in short, a matter of how income will be redistributed. How, not whether. With revenue shrinking because of the recession, some redistribution is necessary.

In brief, the Democrats want to take a little more from the state’s richest people to avoid giving a little less to its poorest. Douglas wants to give a little less to its poorest to avoid having to take much more from its richest.

Again, the “little” is as important here as the “less” and the “more,” If the Governor gets all the health and welfare benefit cuts he wants, Vermont’s poorest will not go hungry. Don’t bet next month’s rent that any of them will even give up their cable TV service. And if the Democrats override Douglas’s budget veto and their tax plan becomes law, Vermont’s richest will not become noticeably less rich. If a few of them get so miffed that they move away, the preponderance of the evidence indicates that they will quickly be replaced by newcomers with just as much money (and perhaps a more generous outlook).

This redistribution debate has been discussed. Another has not. That’s the one by which Douglas wants to give the poorest a little less so that he can give some wealthy folks a little more.

The name of this policy is “economic development.” It’s one of the few budget items on which Douglas wants to spend more than the Democrats, about $7 million more to help businesses start or grow.

Good idea, if it creates lots of good jobs. But whether economic development programs creates jobs that wouldn’t have been created anyway is debatable. What is not debatable is that on its way to creating jobs (or not), economic development is a subsidy to businesses, which tend to be owned and controlled by relatively affluent people. It is, then, another redistribution of income upward. Here Douglas does not simply want to hold steady the tax bills of the wealthy; he wants to give some of them money.

To the Democrats, Douglas’s budget does not hold anyone’s taxes steady. They argue that by shifting more financial burden from the General Fund to the Education Fund, and by lowering the” income sensitivity level ” (the household income below which property taxes are paid by income, not home value) from $90,000 to $75,000, the Governor’s plan would require a large increase in property taxes.

Not so, says Douglas, at least not if the schools would do what he wants them to do and hold their per pupil spending level for the next year or two.

That is, to his credit, a specific proposal. Whether it’s a realistic proposal or just another way of shifting the tough choices and the political danger to someone else while he poses as the taxpayer’s friend, is today’s final question, one that will be examined in the near future.