Thursday, February 26, 2009

Orwellian Deficit Mitigation

The state House’s so called “deficit mitigation” bill passed unanimously but ran into a problem in the Senate, where Republicans opposed the measure on a party line vote.

The bill draws $373.3 million from President Obama's federal stimulus package and $281.7 million from the state’s "rainy day fund'' for fiscal emergencies. It incorporates $280.6 million in dubious temporary cuts and revenue increases, $50 million in contract cancellations by the governor, $49.2 million in labor savings yet to be negotiated with state-employee unions and $40 million in federal Medicaid funds.

It is important to pause here and notice that deficit mitigation relates only to the current hole in the bottom of the state’s treasury; the Damoclean sword hanging over the heads of both legislators and the governor is a hefty $8 billion projected “shortfall” in revenues.

The word “mitigation” is a euphemistic fig leaf that hopefully will not signal to taxpayers that the state has a gaping hole in its budget that can only be closed by spending cuts or tax increases. A tax “shortfall” is a cleverly rhetorical construction that induces people to believe that someone goofed in collecting taxes, and it saves the tax collector the trouble of justifying tax collections. Both words have been fetched from the dung heap of George Orwell’s Animal Farm and ought to be spurned by honest journalists addicted to calling things by their right names, the first duty of journalism.

Republicans were perhaps looking forward to this larger $8 billion deficit when leaders of the party said that the House’s deficit mitigation bill “did not go far enough.”

The mitigation bill itself is subject to future mitigation, and there are few economists and traders on Wall Street who believe the economy will mend quickly under the influence of the gargantuan $3.4 trillion spending bill passed recently by the US Democrat dominated Congress.

National Republicans wanted significant spending cuts; they got instead a spending spree and a promise by the Obama administration to shake the change from millionaire’s pockets. The new spending proposed by the Obama administration will be paid by borrowing more money from the Chinese whom Secretary of State Hillary Clinton has recently placated, dunning the millionaires and inflating the currency, which ultimately will result in a loss in the value of the dollar.

Just as Governor Jodi Rell had finished a bracing address during which she warned that reducing the deficit would be painful, Democrat leaders in the House and Senate discovered a shoebox full of money tucked into the dark recesses of Connecticut’s closet containing $220 million from various off-budget funds to balance the budget

And so now we are back to square one. The bulk of the proposed deficit mitigation is the sort of one time fix that Democrats used loudly to deplore when they were proposed by Republicans in the glory days of the Roland regime. Those one time fixes were painless and did nothing to stem the tide of spending that now threatens to wet the ankles of President Pro Tem of the Senate Don Williams and his Sancho Panza in the House, Speaker Chris Donovan.

The proposed deficit mitigation plan simply puts off to another day deficit reductions though spending cuts or tax increases. “Never put off till tomorrow, “says Mark Twain, “what you can put off till the day after tomorrow.”

Toni Boucher, a House member who a year ago moved over into the senate, said of the mitigation plan, “It doesn't make the structural changes we need to make,'' and Michael McLaughlin, a new senator from Danbury, opposed the plan because 25% of the mitigation -- the $220 million from various off-budget funds to balance the budget – is still up the sleeves of magicians Williams and Donovan. The so called “savings” in the bill, said McLaughlin, “are not real yet.”

Williams candidly admits to an imperfect solution but, borrowing a hackneyed phrase from Bill Curry, he does not want to “let the perfect be the enemy of the good. We have such a challenge and so many difficult decisions, and when we balance the budget this year ... no one will be able to say that is a perfect solution. It virtually closes the deficit in this fiscal year.''

The $8 billion Damoclean sword is still hanging from the ceiling of the state legislature. But at the moment, none but a few Republicans in the senate wish to acknowledge it. Full of a buoyant inertia, Democrats are quite convinced they will be able to muck along on their usual path, determined that practical solutions to the real deficit should be painless and soothing to their constituents, rather than perfect and effective

___________
Post a Comment