Big issues, hard choices, weak decisions

Budget time in hard times poses some stark choices, both in Congress and in Olympia. How are we doing?
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Budget time in hard times poses some stark choices, both in Congress and in Olympia. How are we doing?

"To govern is to choose," observed Nigel Lawson, former British Chancellor of the Exchequer. At this time of budget decisionmaking at national, state and local level, we would do well to recall as well the second part of Lawson's statement on governance — namely, that "to appear to be unable to choose is to appear to be unable to govern."

Nationally, President Obama and the Congress face the need to finance Social Security, Medicare, and Medicaid; interventions in Iraq and Afghanistan; financial/economic rescue packages; the normal business of government; and, on top of it, ambitious new Obama initiatives in health care, energy, and education. All this without burying this and the next generation in public debt.

It is just as well that the latter initiatives, for now, seem destined for extended debate in the Congress before having any chance of near-term passage. The health care and energy agendas, in particular, are complex and could have many unintended consequences.

Health care, right now, accounts for 21 percent of Americans' personal consumption. There are subchapters to the story. For instance, some 10 percent of Americans consume some 60 percent of medical care. Among those who consume it least are those who presently, by choice, are uninsured. Many Americans who are under 40 and in general good health simply opt to go without health coverage, playing the odds that they will not incur big health-care expenses in the near term. Mostly, they are right but those who lose their bets can be left with costs beyond their means. Others, in all age groups, simply cannot afford to pay the premiums and/or cannot obtain appropriate coverage because of pre-existing medical conditions.

I have taken part in numerous exercises which involved development of national health-care schemes that would provide coverage to those who need it but at the same time contain exploding health-care costs. A universal, government-run scheme? A public/private scheme which offers choices among private insurers (much as the Medicare prescription-drug plan)? A universal scheme offering catastrophic (i.e., major medical) coverage to all, but with a high deductible which patients would have to pay before that coverage kicked in? A requirement placed on individual citizens to obtain their own coverage (as with state-mandated auto insurance requirements) or on employers to provide it?

Sponsors of one scheme or another — including Obama in his advocacy of his current proposal, still under development — always claim their plans would contain costs. But, on close examination, they do not.

My personal preference for a first-phase plan would be a) catastrophic coverage for everyone, provided by b) private insurance companies meeting federally required standards for that coverage. Medicare and Medicaid would continue to serve the elderly and the poor. But that is not satisfactorily ambitious for national health insurance's principal advocates. Thus the big Hillarycare plan of 1993-4, scuttled by Congressional Democrats, and the evolving Obama plan, at present still in its formative stages.

Energy is another problem area. A BTU tax, proposed and rejected in the early Clinton administration; "cap-and-trade" proposals adding to the cost of oil, coal, and natural gas; or just plain at-the-pump big gasoline-tax increases — all, in one way or another, would amount to big new tax burdens which, in turn, would finance development of alternative fuels that might or might not turn out to be economically efficient. In this field, environmental belief often has run ahead of hard-nosed cost-benefit analysis. Present cap-and-trade proposals have an uphill path in the Congress, where legislators of both parties fear what cost-benefit studies might yield.

Here at home, Gov. Chris Gregoire and the Legislature are responsible for creating a major part of the huge deficit with which they now must cope. On taking office, Gregoire pledged to restrain spending, not raise taxes, and review the huge number of "tax expenditures" (i.e., loopholes and subsidies) benefiting politically favored companies, such as Boeing, and certain business sectors. But, in her first term, she and the Legislature substantially raised both taxes and spending — but taxes not nearly enough to pay for the spending — and added new tax loopholes without killing any of the old ones.

Public spending levels, once established, are always difficult to reduce. Public-employee and teachers unions, among other groups, figure they helped elect state officials and threaten to punish them if they freeze or reduce their pay and benefits. Unemployment, social service, and health costs always rise in a recession — and they will continue to rise for at least the next six months. Tough fiscal policy always is promised. But, in the end, elected officials always find it easier to seek new revenue sources than take goodies from politically potent single-issue or single-interest groups.

Already a search is on to provide new multibillion-dollar subsidies to Boeing Co., our local version of the Somali pirates, to quiet that company's fresh threats to move operations out of state.

When the Legislature adjourns, it will do so to the accompaniment of tax-increase proposals in this already highly-taxed state. An income tax, if only for highest-income individuals? (Only over her dead body, Gregoire says.) That brings us back to increased sales taxes, which hit hardest those least able to pay. And, of course, local-level property taxes, penalizing families and homeowners. Nominally liberal elected officials once again will propose to increase the regressivity of our tax system while preserving tax breaks which, if repealed, would close the budget deficit several times over.

At state and local level, in addition, there will be little serious cost-benefit consideration of projects which could not withstand it. The 800-pound gorilla of these, of course, is Sound Transit's pending three-county light rail system, to be financed by the largest local-level tax increase in the history of the United States — at least $23 billion and no doubt much more, if present construction delays and route changes continue. The system, still behind its Seattle construction schedule, will not move passengers in any number for several years, whereas immediate expansion of bus service would cost far less and move more passengers to far more destinations now and in the future.

Then we have Mayor Greg Nickels' proposed several-hundred-million-dollar gift to Vulcan Inc. to change traffic patterns near its South Lake Union real estate developments, without relieving traffic congestion, whereas a far smaller investment would alleviate that congestion in and near the Mercer Mess. Having gifted Vulcan with an Allentown trolley, running virtually empty between Westlake Center and South Lake Union, Nickels and some City Council members now propose to extend trolley service to other parts of the city — cutting regular bus service in Seattle neighborhoods in order to fund the new service. Then there is the matter of Nickels' proposed new city jail.

State-local decisionmaking still is not complete regarding Alaskan Way Viaduct and Evergreen Point Bridge replacement or repair. Will serious cost-benefit analyses precede those decisions? Let us pray.

As the man said, not to choose is not to govern. It is appropriate that, near the April 15 deadline for filing our tax returns, we should consider the choices at all levels of government which are and are not being made. If you want what you regard as enlightened choices to be made, make your voice heard. If you don't care, or care and don't speak up, we will get the usual outcome: Those with the biggest political clout will get what they want from those governing, whether or not it makes any sense for the rest of us.


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About the Authors & Contributors

Ted Van Dyk

Ted Van Dyk

Ted Van Dyk has been active in national policy and politics since 1961, serving in the White House and State Department and as policy director of several Democratic presidential campaigns. He is author of Heroes, Hacks and Fools and numerous essays in national publications. You can reach him in care of