Democratic Arrogance And The Budget

Having raised taxes during his first term by $1.5 billion, the largest tax increase in state history, Governor Dannel Malloy is now poised to sign a biennial budget the bottom line of which is either $36.6 billion or $44 billion, according to CTMirror. Over two years,” CTMirror reports, “the new budget would spend $44 billion, based on the current method for reporting Medicaid spending,” a true figure of expenses now hidden behind an iron mask of gimmickry.

Democrats in the General Assembly – Republicans by design were excluded in the construction of both Mr. Malloy’s budgets – this year engaged in the most costly gimmick in state history, moving upwards of $6 billion in Medicaid costs outside the state’s constitutional cap, a sleigh of hand that makes a fiction of both the cap and the constitutional voice of all the citizens in Connecticut, whatever their political affiliation. Medicare costs for the next fiscal year amount to about $5.3 billion, part of which, about $3 billion, is offset by federal aid. The federal government -- now in arrears by about $17 trillion, a debt that has been increasing on an average of $2.77 billion per day since September 30, 2012 -- partially finances Medicaid for the first two years of Obamacare, after which the states assume payment for both the program and Medicaid liabilities, which will be considerable.

The constitutional cap was a legislative placebo offered by the administration of former Governor Lowell Weicker that enabled Mr. Weicker to harness a few votes in the General Assembly to pass his 1991 income tax – after Mr. Weicker had publically sworn in his gubernatorial campaign that instituting an income tax while the state was facing a deficit of a little over $1 billion would be like “pouring gas in a fire.” The ploy worked, the income tax was passed and, in the course of the following two decades, the bottom line of Connecticut’s budget more than tripled – that’s TRIPLED. Connecticut’s last pre-income tax budget was $7.5 billion; the current Malloy budget is $18.6 billion in the fiscal year beginning July 1 and $19 billion the next fiscal year.

In 2013, we may conclude positively and without any ambiguity 1) that spending follows in the rut of taxation so that increased taxation ALWAYS is followed by commensurate increases in spending, 2) the word “constitutional” is an term of art among Connecticut progressives in the legislature and the state house, and 3) Connecticut is now – like some of its corruption clogged, mismanaged cities – a one party state.

The two most important characteristics of progressivism are its disdain for limits and its blind faith in the omni-competence of government. Joined to a unitary state, the heady combination is both intoxicating and corrosive to liberties. Not only is the Malloy administration the most expensive in state history, it is also the most aggressively progressive.  

Democrats in Connecticut completed their absolute control of state government the day after Dannel Malloy was sworn in as Governor, and the problem with absolute power, Lord Acton reminds us, is that it corrupts absolutely. “Great men,” Lord Acton averred, “are almost always bad men.”

The limitless power now enjoyed by Democrats in Connecticut would make a saint stray in the direction of arrogance, and none of the members of the state’s General Assembly are saints. If men were saints, government itself would be unnecessary; so said James Madison, widely regarded as the father of the U.S. Constitution as well as the Bill of Rights, both of which set limits to governmental power.

Madison’s full quote, found in the Federalist Papers, should be swallowed whole unparsed:

If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.”

One of the auxiliary precautions that people supposed would prevent the state’s General Assembly from spending at will was the constitutional budget cap – RIP, June 1, 2013.

The Interesting Times of Dannel Malloy

Connecticut no longer can produce sufficient revenues necessary to pay for its improvident spending. Its revenue engines, after years of uncontrolled acceleration, are sputtering and wheezing, businesses are looking for the exit, and the ONLY remaining option – assuming the state is not interested in declaring bankruptcy as its itch to spend dooms all prospects of recovery – is real spending reform.

Real reform would involve identifying spending drivers and offering solutions that cut spending permanently. Temporary and half solutions will not do. And spending reform, always painful, cannot be accomplished in the absence of a reform vanguard made up of courageous politicians and tribunes of the people who are willing to press needed spending reforms in the face of a strenuous opposition from entrenched interests.

One of the courageous politicians very well could be Governor Dannel Malloy. When Alexander Hamilton was pressing in the Federalist Papers for “energy in the executive,” he might well have been thinking of someone like Mr. Malloy.

Mr. Hamilton, arguing for a unitary executive and against an executive department in which the chief executive should render decisions in concert with a council, put it this way:“Energy in the executive is a leading character in the definition of good government. It is essential to the protection of the community against foreign attacks: It is not less essential to the steady administration of the laws, to the protection of property against those irregular and high handed combinations, which sometimes interrupt the ordinary course of justice, to the security of liberty.”

By “high handed combinations,” Mr. Hamilton was pointing to the special interests of his day, those suckers on the Republic who know well how to turn representative assemblies to their own purposes. The expression might well refer in our day to business cartels or union interests that easily could, by cuddling with powerful politicians, interrupt “the ordinary course of justice” and pervert “the security of liberty.” Pointedly, the purpose of“energy in the executive” is, in Hamilton’s view, to secure the inborn liberty of the individual “against the enterprises and assaults of ambition, of faction and of anarchy.” And no one reading Mr. Hamilton can fail to notice that the“high handed combinations” that deprive citizens of their liberty do so by a steady assault on laws protecting PROPERTY.

Mr. Malloy, everyone will agree, certainly is an energetic executive. Whether he has been captured by special interests – either the progressive gravitational pull of his party or powerful union interests or political campaign contributors or large corporations he has favored with tax money – is a matter that may be clarified after Mr. Malloy’s second budget is put to bed.

But first, Mr. Malloy’s first budget is in need of repair. Time and circumstances have continually blown large deficit holes in Mr. Malloy’s Plan B budget. The latest hole in the budget bucket amounts to $415 million, according to estimates provided by state Comptroller Kevin Lembo.

The correlation of forces in the General Assembly is such that Democrats – used to operating on the premise that every deficit presents an opportunity to jack up taxes -- will not be receptive to spending cuts; and Democrats, by their sheer numbers, control the business of the General Assembly. Indeed, the Democratic dominated General Assembly invested Mr. Malloy with extraordinary powers when his first budget, Plan A, ran aground on the Gibraltar of union opposition: Legislative Democrats, abandoning their constitutional responsibility to affirm final budgets, approved Mr. Malloy’s larval Plan A budget, rejected by the unions in budget negotiations, and pre-approved without legislative review the governor’s post union-negotiated Plan B budget.

Mr. Malloy’s first budget included the largest tax increase in state history, phantom savings, and a signed on the bottom line contract with unions that assured to the Democrats’ most pampered special interest three percent raises and increased benefits nine years into the future, a savings“hand cuff” that will hobble the governor’s negotiations with unions during his upcoming budget negotiations.

Hanging over the special session called to resolve the $415 deficit is Mr. Malloy’s vigorous, often repeated pledge that he will not resort to tax increases in backfilling Plan B’s deficit.

Given the General Assembly’s temperamental and ideological indisposition towards spending cuts, Mr. Malloy will need Republican support in the Assembly to secure even minimal savings to rebalance, for the umpteenth time, his first defective Plan B budget.

Republican leaders in the Assembly – effectively shut out of budget negotiations in 2011 – appear to be game, and there is no indication thus far that Mr. Malloy, having secured Republican support without which he will be unable to make cuts necessary to balance his first budget, will NOT once again stiff Republicans and shoo them out of the room when the time rolls around to present to the Democratic General Assembly a second budget that may, like Mr. Malloy’s first budget, rely heavily on tax increases for a deceptive“balance.”

Republicans, Democrats and tax payers in Connecticut live, as the Chinese philosopher says, not without a shutter, “in interesting times.”