Malloy On The Stump, An Orwellian Perspective

A few weeks after announcing he would not officially begin his campaign until the General Assembly had shut down its short three month session in May, Governor Dannel Malloy officially opened his gubernatorial campaign in Stamford, his old political stomping grounds. Mr. Malloy had been mayor of Stamford for four four-year terms before becoming governor.

In Stamford, Mr. Malloy explained his “early” announcement to reporters who long ago had exploded the absurdity that he was not running for governor. He had in fact been campaigning behind the veil for some time; like his counterpart in the beltway, President Barack Obama, Mr. Malloy is a perpetual campaigner. And like most politicians, he is given to telling what Mark Twain used to call “stretchers.”

The Stamford Advocate reported on the switcheroo:

“Malloy said that, in part, his rationale for waiting to make his re-election effort official was to avoid distractions during his recent successful effort to get the General Assembly to enact legislation to raise the minimum wage to $10.10 an hour.

"’I didn't want to politicize that issue unduly,’ Malloy said. ‘I talked to Lt. Gov. Nancy Wyman several times about when is the right time to start the campaign, and this seemed like the right time.’"

The General Assembly, some reporters know, is Mr. Malloy’s Pomeranian, the Connecticut legislature having been dominated by Democrats ages ago, long before some of the state’s younger reporters were wetting their diapers. Perhaps one of them is keeping a record of Mr. Malloy’s politically opportune fantasies. If so, he or she will understand the full import of George Orwell’s remark that “To see what is in front of one's nose needs a constant struggle.”

In an essay that ought to be required reading in all journalism schools titled “Under Your Nose,” Mr. Orwell wrote:

“The point is that we are all capable of believing things which we know to be untrue, and then, when we are finally proved wrong, impudently twisting the facts so as to show that we were right. Intellectually, it is possible to carry on this process for an indefinite time: The only check on it is that sooner or later a false belief bumps up against solid reality, usually on a battlefield.”

Mr. Malloy’s official Stamford announcement gave Mr. Malloy the opportunity to stop road testing his campaign and launch his vehicle.

Mr. Malloy’s 2014 campaign appears to be a replication of President Barack Obama 2012 presidential campaign. Connecticut has been battered by a rough economic climate, Mr. Malloy told the Democratic in Stamford. He was careful not to draw the connection between Connecticut’s sluggish economy and Obamanomics. Hey, sluggish economies happen. The national recession ended in 2009. However, about three in five jobs added since the recession’s end pay less than $13.83 per hour. Lower-wage occupations were 21 percent of recession losses and 58 percent of recovery growth, while mid-wage occupations were 60 percent of recession losses and only 22 percent of recovery growth. Connecticut still lags behind the nation in job growth. As of August 2013, the New England Economic Partnership (NEEP) reported, “Connecticut had regained 62,200 jobs, or 51.3% of those lost. By comparison, the U.S. economy had recovered 78.2% of the 8.6 million recession jobs that it lost.”

During his first term as president, Mr. Obama commanded the heights: The presidency and both houses of Congress had fallen to Democrats. Instead of focusing the energies of his office on repairing the collapsed housing market – which would have been a painful ordeal for the progressive president – Mr. Obama reached for the stars and pulled Obamacare out of his hat. He also engaged in corporate cronyism on a massive scale and managed to pull off a win against moderate Republican Mitt Romney by capturing the “social issues” battleground from which Republicans had retreated with their tails between their legs.

Mr. Malloy’s campaign strategy may be deduced from the remarks he made in Stamford. The Malloy program no doubt has been laboratory tested by one of the many strategy groups in the business of winning campaigns. Global Strategy, whose Vice President Roy Occhiogrosso continued to speak in news reports in favor of Mr. Malloy long after he had disassociated himself from the Malloy administration, likely will play some behind the curtain role in Mr. Malloy’s re-election effort. But as governor of a northeast progressive state, Mr. Malloy will be able to draw upon a vast reservoir of political magicians, some tied by progressive political umbilical cords to the Obama administration, many of which are not formally associated with political parties.

In Stamford, Mr. Malloy said that Connecticut’s economy was on the mend, largely owing to his programs. Connecticut’s pre-Malloy “$3.6 billion deficit, the greatest deficit in the nation on a per-capita basis," has been liquidated. In fact, the deficit has been resilient to Mr. Malloy’s ministrations.

Connecticut’s non-partisan Office of Fiscal Analysis (OFA) and the Governor's budget office, the Office of Policy and Management (OPM), have both projected a deficit of about $1 billion in the next 2016 biennial budget. 

Mr. Malloy reduced a major portion of his “inherited deficit” through the imposition of the largest tax increase in state history, a $1.5 billion tax on entrepreneurs and business people who might have used the dollars appropriated by a Democratic Governor and a Democratic dominated General Assembly to invigorate Connecticut’s painfully slow, nearly jobless recovery.

Mr. Malloy’s tax increase was not mentioned during his re-election stump speech in Stamford, which is on a par with offering a history of the Elizabethan period in Britain that does not mention Queen Elizabeth. Neither did Mr. Malloy mention that Republican Governors Jodi Rell and John Rowland did not have at their command a Republican dominated General Assembly. Although it is the legislature that shapes and affirms budgets presented to it by the executive office, Mr. Malloy was content in his Stamford re-election announcement to lay at Mrs. Rell’s feet the debt he inherited. Mrs. Rell is likely to play in Mr. Malloy’s coming campaign the same opéra bouff role played by outgoing President George Bush in Mr. Obama’s first – and second – presidential campaigns.

Mr. Orwell noted in his “Under Your Nose” essay that political fantasies eventually bump into reality, at which point, usually too late, those who have been lulled to sleep awaken with truth-blistered eyes:

“In private life most people are fairly realistic. When one is making out one's weekly budget, two and two invariably make four. Politics, on the other hand, is a sort of sub-atomic or non-Euclidean world where it is quite easy for the part to be greater than the whole or for two objects to be in the same place simultaneously. Hence the contradictions and absurdities I have chronicled above, all finally traceable to a secret belief that one's political opinions, unlike the weekly budget, will not have to be tested against solid reality.”

The Democrats’ 10 Percent Solution With Malloy as Firewall

The split between Connecticut’s two major parties is most dramatic on the question of spending.

Governor Dannel Malloy took a pledge early in his administration, after he had imposed upon the state the largest tax increase in its history, reminiscent of a pledge made by former President H.W. Bush: No new tax increases. Internal pressures were such during the Bush administration that the president reneged on his pledge.

The pressures are always there, especially in tax prone Connecticut. It was the fashion during the administration of Republican Maverick turned Independent Lowell Weicker to regard deficits as revenue rather than spending problems; and, of course, the solution to a revenue problem is to boost revenue.

This misperception – always encouraged by politicians uncomfortable with spending cuts – had tripled the bottom line of Connecticut’s budgets within the space of three governors. Focused on revenue boosts, Mr. Weicker and succeeding Republican Governors John Rowland and Jodi Rell rarely were put in the uncomfortable position of having to disappoint powerful union interests. Spending inched inexorably up.

When Mr. Malloy was installed as governor, it was generally supposed that the spending tap would be turned wide open. The so called“firewalls,” Republican governors who had offered a mild resistance to spending increases, were gone: Laissez les bons temps rouler, as they say during Marti Gras in New Orleans that precedes an abstemious Lent .

Democratic leaders in the General Assembly, impatient with the snail’s pace progress of a self-proclaimed progressive governor, have now proposed changes in the Malloy budget that increase spending by 10 percent. There is every reason to believe that Democrats stuck on stupid are still in a “let the good times roll” frame of mind.

And why not? Moderate Republican office holders in Connecticut have been washed away by the onrushing progressive high tide. Consider the number of Republican moderates who have fallen in recent years under the boots of the progressive hordes in Connecticut. Within Connecticut’s all Democratic U.S. Congressional delegation alone, three moderate Republicans– Nancy Johnson, Rob Simmons and Chris Shays, the last moderate Republican in New England before he surrendered his seat to current Democratic U.S. Representative Jim Himes -- had been replaced by ambitious progressives. Mr. Malloy and his Lieutenant Governor Nancy Wyman proudly march cheek by jowl with striking union workers, and no one winces. The largest tax increase in Connecticut history was accompanied with a union deal that assured salary and benefit increases to state workers of 3 percent nine years out, an arrangement at first rejected by union representatives, which rejection was characterized by Edith Prague, a longtime supporter of Connecticut unions, as a form of unthinking madness.

Despite a stalled economy, the progressive parade in Connecticut marches merrily and heedlessly on. Occasional disputes with leaders in the opposition party are imperiously brushed aside by Democrats who outnumber Republicans in the state by a commanding two to one majority. The difference in sheer numbers relieves Democrats of the necessity of quibbling over crucial economic points imperfectly grasped by an easily distractible media in the grip of an economic vise that has considerably reduced its own numbers.

What all this really means is that Mr. Malloy has now become Connecticut’s spending “firewall.”And the governor is surrounded by progressive Democrats quite certain that more spending will hasten the arrival of better times, a philosophy of governance to which Mr. Malloy also subscribes. On matters upon which there are some discernible differences between Mr. Malloy and the Democrat dominated General Assembly –say, education reform – Mr. Malloy’s programs have been refined by progressive leaders in the legislature. Both President Pro Tem of the Senate Don Williams and Speaker of the House Brendan Sharkey have had a good deal of practice in curbing the modest ambitions of past Republican governors, and there is no reason to suppose they will not employ their talents to frustrate a governor who proves to be insufficiently progressive on matters they consider ideologically important – like, to fetch for one example, ramping up the progressive income tax on Connecticut Gold Coast millionaires.

While Mr. Malloy has said he is averse to tax increases, he has moved steadily in the direction of increasing state revenue through a series of measures – borrowing money to pay off budget expenses, reneging on a gentleman’s agreement with “bad” energy producers to liquidate a “temporary” tax on the production of electricity, boosting the notorious gross receipt tax on gasoline, and short-sheeting hospitals, to cite but four examples – that most charitably may be described as revenue enhancers.

All eyes in the General Assembly are fastened on the governor. Given an inch, progressive legislators have now demanded a yard – a ten percent increase in spending. It is precisely incremental increasing in spending of this kind that has tripled the bottom line of Connecticut budgets since the imposition of the state income tax in 1991, a short two decades ago. Progressives in the General Assembly are betting that while the governor’s no tax increase spirit is willing, his progressive Democratic flesh is weak. Because taxing and spending are inextricably connected, the easiest way to drive up taxes by 10 percent is to increase spending by 10 percent. And the red ink, in progressive strategy, is little more than an inducement to impose a steeper progressive tax on greedy hedge fund managers living the life in Fairfield County.

Who’s Minding the Store?

State auditors recently concluded an audit of the state Department of Mental Health and Addiction Services (DMHAS). Their findings, both depressing and alarming, suggest no adults have been directing the agency. The audit covered only the fiscal years 2009 and 2010.

Among the findings were these:

Office Of Fiscal Analysis To Malloy: Your Budget Doesn’t Compute

The guys and gals who work at the Office of Fiscal Analysis (OFA) are the “go to” people for legislators who do not carry an Encyclopedia Britannica around in their heads. Throw some number on the floor before them and they can tell you if the numbers are accurate or fictional. Even on a bad day, they can tell you how many angels fit on the head of a pin. And in our statistical age, when every “non-partisan” agency is connected at the hip to fiercely partisan politicians, the OFA is genuinely non-partisan -- in the way that math or water is non-partisan.

Having examined the estimated savings in the Governor Dannel Malloy-SEBAC budget, the OFA has found that 60% of the savings claims made therein are UNVERIFIABLE.

The bad news was brought to the attention of the general public by Keith Phaneuf of CTMirror:

“Nonpartisan legislative analysts say they can vouch for less than 40 percent of the $1.6 billion in labor savings figured into the next biennial budget, and are unable to assess the rest--more than $1 billion--because of unanswered questions or insufficient data, according to a memo submitted late Monday to the General Assembly.”

Not to worry, say the epigones of transparency in the Malloy administration and their Democratic chorus in the General Assembly, the savings are real. The Malloy administration paid a good chunk of cash to an actuarial consulting firm outside of state government – perhaps the first and last time the Malloy administration will outsource state business – to produce the figures they needed to show a balanced budget.

Then the massive budget documentation was dumped on the doorstep of the ladies and gents at the OFA for verification. No dice, said the OFA: “Please note that at this time we are unable to determine or verify the levels that are contained in these estimates in many cases," OFA Director Alan Calandro wrote in a memo to Republican House leader Larry Cafero.

No actuarial analysis had been offered to OFA to support a contention that $67 million would be saved by increasing penalties for senior employees who retire earlier than the normal age; OFA could not determine from the figures provided to them how much would be saved by a new hybrid retirement plan for higher education employees; the Malloy administration had not provided to OFA their assumptions in support of a claim that health care provision would save the state $245.9 million in two years; the OFA lacked documentation to support a claim made by the Malloy administration that a new Health Enhancement Program would reduce health care claims by 4 percent in the first year and 10 percent in the second; OFA intimated that the new health care plan, which relies on preventative services, might increase costs, figures not provided in the administration’s savings estimates. The OFA Memo to Cafero goes on and on, piling up doubtful “savings.”.

The OFA’s aspersions are regarded by Office of Policy and Management Secretary Benjamin Barnes as a “delaying tactic” to prevent speedy approval of the Malloy-Williams-Donovan-SEBAC budget. Mr. Barnes has acknowledged that some savings targets amounting to $345 million were of necessity poorly defined. The OFA could not affirm such savings because “information as to how savings were estimated has not been provided."

The OFA’s inability to verify the cost savings in the Malloy budget has not disturbed the  equanimity of Senior Malloy advisor Roy Occhiogrosso, who said, despite the OFA’s misgivings, that the Malloy administration and the unions were “confident in the numbers.” But then Mr. Occhiogrosso’s confidence is unbounded – even when he is told by Mr. Malloy’s OPM Director that $345 million of the reputed savings boosting his confidence is questionable.

The budget itself rests upon $1.6 billion in union givebacks that will not be given back until the budget has been passed by the union dependent Democratic Party cohort in the General Assembly, whose confidence matches that of Mr. Occhiogrosso.

This year’s $40 billion two year budget has a novel twist to it: The budget is pre-approved, which means the General Assembly will pass a bill that rests on unassured, assumed savings: Union have not yet approved contracts that include expected givebacks of $1.6 billion.

Following seven hours of debate, Republican Senator Andrew Roraback, a 17 year veteran of the General Assembly, offered an amendment requiring the Democratic dominated legislature to return in special session to vote on the SEBAC agreement. Addressing Lieutenant governor Nancy Wyman, Mr. Roraback said:

“It doesn't feel right, Madam President. If this bill passes, we will all drive blindly into the night, asking ourselves, 'What was it that we just did?'… I can't ever remember a time in the history of this body when we have pre-approved a contract change. ... Yet, we're ratifying something that is in the ether. ... I have never before seen anything that remotely resembles the process of this bill. ... It is customary for the horse to come first and then the cart.''

Mr. Roraback’s amendment was defeated, and confident majority Democrats in the legislature promptly voted in favor of putting the cart before the horse.

The Real Budget Deal

Fresh from the Democratic Party’s web site, here is Democratic Party chieftain Nancy DiNardo’s reaction to the budget deal that Gov. Dannel Malloy wrested from union representatives:

“Thank you to Governor Malloy, Lt. Governor Wyman, the state employees, and the Democratic leadership in the Assembly for this major accomplishment. This is a critical first step, and there is more work to do, but this is definitely a good day for Connecticut taxpayers. This is what shared sacrifice and real leadership looks like.” - Chairwoman Nancy DiNardo

Though particulars of the deal were not revealed during the weeks of closed door negotiations, a broad outline of the Malloy administration-union deal, according to news reports, involved a union give back of $1.6 billion, $400 million short of Mr. Malloy’s earlier stated goal of $2 billion in the biennium budget. The savings shortfall is to be recovered from resources other than tax increases, according to the governor’s office.

Tucked into the present budget is a surplus of $1 billion that may be deposited in the state’s depleted “rainy day” fund or spent to finance a $900 million improvement of the state’s newest dollar-swallowing White Elephant, the University of Connecticut Health Center, or some other state financial “need” that will arise in the near future. Political columnist George Will defines a “need” as “a want that’s more than 24 hours old.” Needs of this kind have driven Connecticut to the brink of bankruptcy, and the state’s new one party infrastructure will not lessen its neediness.

Mr. Malloy intends to liquidate the greater part of Connecticut’s red ink, the largest per capita deficit in the nation, through a $ 1.4 billion tax increase that Mrs. DiNardo feels is “good for taxpayers.” The Democratic budget – no Republicans in the General Assembly were permitted to adjust it, or even breathe upon it – is the first entirely partisan budget that has seen the light of day in decades. This fiscal term, the Democrats control both the governor’s office and the General Assembly by a margin that renders collegiality among different Party members unnecessary.

Deferring to unions, the governor approved a four year “no lay off” clause that would be irrevocable even if, in future days, the red ink were to rise to cover Mrs. DiNardo’s ankles. The governor also extended the union agreement an additional five years. Unions leaders agreed to forgo raises for two years, after which salaries will increase at 3 percent for three years. Dreaded lay offs were removed from the bargaining table, and the governor considerably narrowed union give backs when, even before serious negotiations had begun, he steadfastly resolved to maintain the state’s obligations to municipalities, effectively removing the need for “shared sacrifice” at the town level -- all in all not a bad deal for the unions.

Before the doors were bolted shut on negotiations, Mr. Malloy suggested that union leaders and Democratic members of the General Assembly should quickly accept his proposal and lay on him the expected political blame arising from taxpayer and union dissatisfaction.

The Democratic budget raised taxes at a time when the governors of contiguous states had forwarded budgets that raised no taxes. Connecticut’s Democratic budget doubles the corporate surcharge during the nation’s deepest and most prolonged recession in many years, when many businesses – as opposed to the unsinkable CEOs of some of “too large to fail” businesses – are suffering rising costs and business slowdowns.

In Massachusetts, once derided in Connecticut as Taxachussetts, the Democratic legislature attacked collective bargaining, one of the more aggressive escalators of governmental costs. Republican leader John McKinney referred obliquely to the Massachusetts miracle in his senate response to the partisan Democratic budget when he said that Connecticut’s sister state had done things that “would be unthinkable” in the Democratic dominated General Assembly.

In a story in CTMirror, Mark Pazniokas was one of the few reporters in the state who noted that Mr. Malloy this year had an infrequent opportunity to drive down the costs of union contracts that would not occur again until 2017, “three years after the next gubernatorial election,’ when current union contracts on pension and health benefits expired.

Gubernatorial leverage in union negotiations, in other words, is limited by the date of expiration on union contracts, an arrangement that gives unions an inestimable edge in negotiations with elected representatives in the state that unions would doubtless prefer to maintain, for it prevents governors and legislators from pressuring unions to make deals that Mrs. DiNardo, the head of the Democratic Party, amusingly considers a boon to taxpayers. There is no movement afoot in Connecticut’s new one party state to redress this costly imbalance; neither will union reliant Democrats challenge binding arbitration