Barack Obama’s State of the Union address outlined an ambitious agenda for helping the American middle class, spelling out tax reform (a business tax overhaul), new revenues (tax increases on high income earners) and more spending on basics (free community college, more investment in infrastructure). Immediately, Republicans in control of Congress rejected most of the agenda. Even members of his party squirmed at some of the suggestions.
Back here in Olympia, Gov. Jay Inslee was about a week ahead of the president. In unveiling his progressive agenda for Washington state, Inslee boosted tax reform (closing some loopholes), new revenues (a carbon tax on polluters, a capital gains tax on the wealthy) and more spending on the basics (education, transportation). Immediately, Republicans, in control of the state Senate, rejected most of his agenda, and even some members of his own party rolled their eyes at some of it.
Is it leadership to propose an agenda that’s politically dead on arrival?
The case against rests simply on the idea that you’re wasting time if your agenda can’t pass, especially when some of your own people are skeptical. Inslee’s carbon fee, for example, would tap the state’s largest carbon emitters for fees that could generate some $1 billion per year and it would include targets for reducing said emissions. The money would help fund transportation, education and low-income tax credits. It’s new, it's complex, and perhaps too much for an oft-gridlocked entity to digest.
If the GOP doesn’t like it in principle — arguing that increased costs will simply be passed on to consumers — some Democrats, like Judy Clibborn, head of the House transportation committee — were also less than enthusiastic: “I think that’s a really heavy lift to take a brand-new concept, and that has a relatively unproven revenue stream, and try and get that through the House and Senate with so many unknowables.”
New ideas are, by definition, full of unknowables, and nothing makes a legislator more uncomfortable than political risk. Still, what would people rather have Inslee do? If the governor has yet to prove himself adept at playing the inside game of politics in the Legislature, he’s going big on proposing ways to get around some of the conventional gridlock. It’s not like the inside game is producing results.
Inslee’s carbon fee proposal gets around the gas tax, which most agree won’t be viable forever. Policymakers pretty much agree that an alternative will have to be found sometime. Plus, his proposal adds two things to the transportation mix. One, it pushes the package toward more environmental responsibility. No new state transportation plan has yet been passed, but like other plans, it will undoubtedly be heavy on highway expansions. We can’t continue to pass massive transportation infrastructure proposals without addressing the environmental costs of such plans. Inslee’s idea moves in that direction. Second, in tying the funding source to education and tax relief, it has more social benefit than simply raising the arguably regressive gas tax for more roads.
If nothing else, Inslee’s idea might help rally a bipartisan group of legislators to finally move on retro funding, like a gas tax increase, partly because it’s the devil we know, partly because it is the easiest way to get something passed. It also might be more palatable in this time of lowering gas prices. Plus, a gas tax hike does not need two-thirds support in the Senate to pass, as would a brand new tax. So Inslee’s progressive policy might, at worst, be a nudge toward less-progressive practicality, with a carbon tax to be discussed again another day.
Discussing things another day is part of how the Legislature works, as former state Senate leader Ed Murray has reminded us. Murray, as Seattle mayor, has frequently pointed to progress on the issue of same-sex marriage as an incremental process that gains support and momentum over time. You have to start somewhere, so Inslee’s agenda might make it easier to pass such a plan down the road. Inslee won’t quit on it: As marriage equality was to Murray, so climate change is to Inslee — at the core of his beliefs.
Inslee has also raised the idea of a capital gains tax on stock transactions, a tax common in other states. It’s a sensible source of revenue. Democrats have to show more creativity than simply beating their heads against the solid wall of income tax opposition.
While it probably won’t fly with the tax-averse Republican Senate and with the few tax-avoidant, swing-district moderate Democrats left in the House, it is a reminder that Washington has to begin to reform its tax system and move to something less regressive than its sales-tax based system. Revenue solutions have to be found that don’t make matters worse for those of low and moderate incomes. Hopefully, Inslee’s proposal can help begin a conversation on how to address that.
For both Inslee and Obama, there’s a political calculation at work as well. If their middle-class, progressive agendas fail today, they are setting up 2016. They are showing that the national and local agendas are in sync, which will help Washington Democrats nationalize the agenda, something that drives voter turnout in presidential years.
In other words, failure in the short term could breed success in the long term as the Democrats seek to retain the White House and state party leaders hope to regain the state Senate and retain, perhaps bolster, their state House majority, which was so badly eroded in 2014.
Polls suggest that voters are sympathetic to the carbon tax and somewhat to the high-earners capital gains tax. Earlier this month, an Elway Poll found that 71 percent of Washington voters were inclined to support the carbon polluter’s tax. Fifty-seven percent gave thumbs up to a capital gains tax on profits over $25,000. They will likely be intrigued by which party has the best plans for getting the middle class black on track.
Inslee would do well to embrace Obama’s message on that score.