Economy & Budget

Greenhut: Progressive failure on full display

Greenhut: Progressive failure on full display

California’s modern-day progressive Democrats keep crowing about the huge success they’ve had in taming the state’s budget deficit thanks to Prop. 30’s tax increases and other “reforms,” and now are championing the Jerry Brown model as a blueprint for the nation. Be very afraid.

It’s bad enough that other states have to deal with our residents, who are fleeing our success-punishing tax and regulatory regimen, but now, apparently, they are going to have to deal with our bad ideas, promoted through smug lectures from California’s liberal politicians.

Not surprisingly, the national media have been quick to tout California’s Democratic-led “renaissance.” For instance, The New Republic this week published a feature, “Back from the Brink,” about California progressives having “achieved the impossible” of a balanced budget.

“Progressive Democratic activists identified the straitjacket of rules that had the state tied up in knots, and devised a systematic plan to change them,” the magazine’s David Dayen argued. “Through massive organizing, they transformed the electorate and sidelined Republican obstructionists. Now, with surplus money on hand, they’re getting ready to fight a new battle over the next few years: whether to focus on budget balancing and debt reduction, or to continue to boldly invest in California’s future.”

I chuckled at the “debt reduction” reference. Have you ever known progressive Democrats to keep a lid on spending or to care about paring back the size of pension debt? They will indeed “invest” in California—and you know what investing means. They will throw money at programs and at government employees without improving accountability or insisting on reform.

Yes, the article is right that California’s Democratic leaders did systematically dismantle many of the taxpayer protections that stood in the way of their tax-raising plans, thanks to Brown’s political skills and endless union cash. But that’s a political victory, not a fiscal blueprint.

Brown and his allies killed the two-thirds budget-vote requirement, turning minority Republicans into an irrelevancy. Because of previous supermajority rules, the GOP could tie up budgets, but the result was forcing Democrats to look at the kind of budget cuts and fiscal restraints they abhor. No more. Now, the GOP isn’t even included in the budget process. Now that this “success” has yielded Democratic legislative supermajorities, they can raise taxes whenever they choose. Maybe a moderate Democratic caucus will emerge, but even so-called moderates have always joined the majority when it comes to tax-raising.

The Democrats likewise moved statewide initiative votes to general elections, thus ensuring greater Democratic turnout to support the two big tax increases on the ballot. There was also redistricting and a Louisiana-style jungle primary that—with the support of some good-government Republicans—seems to have further eroded what little power the minority party already had.

The New Republic points to Democratic success at changing voting laws, allowing people to register online. That, along with the vast networking of grassroots and union organizing efforts, resulted in a massive wave of Democratic voters that gave Democrats new congressional seats and supermajority control of both houses of the state Legislature. Lucky us.

Yes, Democrats mustered the powerful interest groups that support them and then rigged the rules to gain more power in a state where the GOP already is on life support. Democratic activists can try to replicate this elsewhere, but I wouldn’t recommend that other states replicate the budget plan.

The Democratic budget blueprint remains the same: keep raising taxes. Dayen argued that Democrats still need to take on Prop. 13 (1978‘s historic property-tax limitation) and eliminate it for commercial property owners. He also called for raising other corporate taxes and imposing a severance tax on oil. Never mind that these tax hikes could crush the real-estate and oil-exploration rebounds that are crucial to the optimistic economic projections that will keep the budget coffers filled.

Old-style progressives gave us the referendum and initiative so the People could keep in check powerful interests. Modern-day progressives are chipping away at that process so no one can challenge the current robber barons, the public-sector unions.

Supposedly, it’s a great victory now that the reform-fighting teachers, prison guards, and other unions can protect their unsustainable pensions and fight reforms that could possibly improve the shoddy public services the left claims to care about. This new blueprint has ignored the “wall of debt” the state government and municipalities are galloping toward.

Despite the governor’s nod to holding the line on spending, this new political dynamic is dependent on the things progressives are incapable of doing: controlling their appetite for increasing the size of government, limiting the demands of labor unions, and halting their desire to tax businesses into oblivion (or Nevada). Just think about the governor’s favored high-speed-rail plan.

Instead of pulling us back from the ledge, the last election may have sent us charging over it. I do agree with Brown and The New Republic that other states ought to pay attention to what’s happening here. But they shouldn’t emulate it. They need to gear up and fight it.

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