Today didn’t start off well, but then I realized that Bobo is off, and things started to look up. Mr. Nocera looks at “When ALEC Takes Over Your Town,” and has a question: Why raise taxes when you can impose draconian budget cuts? This looks to be the plan in Rhode Island. Mr. Bruni says “Don’t Look Down,” and that from euro uncertainty to our own debt battles, we’re too used to hovering over near catastrophe. Here’s Mr. Nocera:
The Rhode Island State Legislature finally adjourned its 2012 session around 3:30 a.m. on Wednesday morning. It had been a brutal last few days.
In May, the State Senate had approved a supplemental property tax increase of 13.8 percent, to be imposed on the residents of Woonsocket, a struggling city with a $10 million deficit. But when the bill moved to the House of Representatives, two conservative Woonsocket representatives refused to go along, and no amount of late-night negotiating could change their minds. Everyone finally gave up and went home.
The state has named a budget commission to grapple with Woonsocket’s money woes. Ultimately, though, a receiver may have to be appointed — which is to say, a person not beholden to the voters, who would nonetheless have the power to abrogate union contracts and do whatever else he or she deems necessary to erase the deficit. Incredibly, the two Woonsocket legislators have pushed for a receiver, despite the pain that it would likely bring their city.
Or maybe it’s not so incredible. It turns out that one of them, Jon Brien, is also on the national board of the American Legislative Exchange Council, or ALEC. Although ALEC is probably best known for its support of the Stand Your Ground law in Florida, the conservative group has a very clear agenda for dealing with state budgets. It wants to shrink them. Although Brien has denied that he is applying the ALEC philosophy to his small city, it looks, in fact, as if that’s exactly what he is doing. It’s not pretty.
Woonsocket’s problems stem from the decision of Rhode Island’s previous governor, a Republican named Don Carcieri, to balance the state’s budget by cutting state aid to the cities. All of Rhode Island’s poorer cities had become dependent on that aid, so when the economy soured, they essentially ran out of money. Providence had to renegotiate the retirement benefits of its municipal workers. Central Falls actually sought bankruptcy court protection — and a receiver was put in charge of its finances. As for Woonsocket, its current difficulties came to light last fall when the school district revealed a huge, unanticipated budget shortfall.
The two Woonsocket legislators quickly decided to apply Rahm Emanuel’s famous maxim about never letting a crisis go to waste. The fact that their town had a big budget deficit meant that if they played their cards right, they could do a lot more than just fix the schools’ problem. They could actually shrink the town government!
And how does one go about doing that? By refusing to go along with tax increases and forcing the city to the edge of bankruptcy, thus raising the possibility of bringing in a receiver. “You never move faster than when you have a piano hanging over your head,” Brien told me. “The receiver is that piano.”
He went on to say that the municipal unions — police, firefighters, teachers — “have been given pensions and benefits the city can no longer afford” but have no incentive to renegotiate. But a receiver, with the wave of a magic wand, can instantly cut their pensions, and there isn’t a thing they can do about it. When I asked Brien how bad the pension problem was in Woonsocket, he told me he didn’t know. “I’m a state legislator,” he said. “I don’t get into that level of municipal finance.”
Here’s the rub. Pensions are not the core problem in Woonsocket. Yes, Woonsocket has a pension shortfall, but it is more manageable than many other places and has almost nothing to do with the current crisis. “The meme in Rhode Island is that if there is a problem, you can trace it back to the public employees,” says Bob Plain, a journalist who runs the Web site RIFuture.org. In Providence, the pensions, with annual cost of living adjustment of up to 6 percent, were, indeed, a huge problem. (Note: My brother used to work for Angel Taveras, the city’s mayor.) But that’s just not true in Woonsocket.
Yet, in Central Falls, the receiver took an ax to retiree benefits, cutting them by 55 percent, meaning that many retirees are now getting pensions of under $20,000. The receiver has also laid off city workers, closed the city’s library and shuttered a popular community center. This is the future Woonsocket now faces, thanks to its own legislators.
Shrinking government sounds appealing. We all have our favorite examples of silly regulations and bloated bureaucracies. But struggling municipalities like Woonsocket don’t have a lot of fat; cutting means reducing or eliminating programs that citizens depend on. And, in any case, in a democracy, the decision of what — and whether — to cut should rest with elected officials who are responsible to voters, not to an unelected receiver using bankruptcy law to unilaterally make cuts.
That may be the ALEC solution, but it shouldn’t be ours.
Here’s Mr. Bruni:
Somewhere between Nik Wallenda’s first step onto a tightrope over Niagara Falls and Greece’s most recent retreat from the brink, it hit me: teetering needlessly on the precipice of disaster wasn’t just the story of the weekend. It’s the story of our days.
Cliff dwelling has become the modern way of life.
We exist, without always having to, on the edge. Or, rather, on one edge after another, some of our own making, others avoidable if we could just summon the maturity, discipline and will.
As cliff dwellers we deal with nothing until the last possible minute and act in timid, impermanent ways, growing all too accustomed to indecision and a bit too inured to dread. Although we have alternatives — paths, however strenuous, back to safer ground — we neglect them, casting our lots with chance. Maybe a wave comes and takes us. Maybe not, and we can contrive some pleasure as we watch the sunset.
On Sunday our gazes were diverted, once again, toward Greece. Its citizens headed anew to the polls, to cast votes that held the possibility of doom for the euro, whose collapse would wreak economic havoc far and wide. The rest of us did what we’d become practiced at. We held our breaths.
But did it have to come to that? Greece’s limbo underscores Europe’s inability to determine once and for all how much it’s willing to invest in the future of the euro. The Continent’s leaders make micro adjustments in lieu of a macro commitment or big decision of any kind. The suspense sometimes shifts locus — today Greece, tomorrow Spain or Italy — but doesn’t end.
That mirrors the serial uncertainty on the opposite side of the Atlantic, where the United States Congress, inept at so very much, excels at catastrophic scenarios and suffixes. It has mastered the -mageddon.
“Taxmageddon,” as it’s sometimes called on Capitol Hill, is the new biggie, looming early next year. That’s when, in the absence of Congressional action, supposedly temporary tax cuts passed under George W. Bush and extended by President Obama expire as automatic spending reductions agreed to at the end of the debt ceiling showdown (“debtmaggedon”) begin to kick in. The combined force of those developments, according to some projections, would be a $700 billion blow to the economy in 2013 and, as the year progressed, a recession.
The current issue of Time magazine not only outlines this doomsday scenario and discusses how kick-the-can lawmakers have “manufactured an irrational cataclysmic event,” but also enshrines “fiscal cliff” as the phrase of the week.
The Times, for its part, presented “fiscal cliffs notes,” explaining that economic growth could slow by 3.6 percentage points next year if Democrats and Republicans can’t reach an agreement that yanks us back from the brink.
They probably will. When they finally must. Which is months away. No reason to rush! Certainly not if the pace of progress in this case mimics the movement (or lack thereof) during debtmaggedon, when an intransigent band of the most conservative House Republicans delayed raising the debt ceiling for so long that the nation’s credit rating was docked.
Everything is a standoff — remember the December battle over the payroll tax? — and all is brinkmanship, even budget votes that were once routine. Three times last year the government came close to a shutdown, and once the Federal Aviation Administration was forced to suspend some operations — flightmageddon! — while members of Congress bickered and $400 million in airline taxes was lost.
There are lesser -geddons as well, like “loanmageddon,” the July 1 point at which the rate for federally subsidized student loans will double to 6.8 percent from 3.4. Wrangling over this began months ago. Wrangling over this continues. Wrangling over this will almost surely produce some kind of extension, no doubt temporary, so that wrangling can resume next year. Even the littlest -geddons get their sequel.
And we get dangerously familiar with feelings of helplessness, with stopgap remedies and with last-minute reprieves, which are enough in some instances, not in others.
Right now Colorado is burning, and more than 55,000 acres and more than 180 homes have been decimated by what is being called the worst wildfire in the state’s history. Six of the 10 largest wildfires in Texas’ history happened last year, when the state suffered its worst drought since the 1950s.
Some scientists connect all of that and other extreme weather to climate change. Many of us feel culpable, and many of us fear worse. But, accomplished cliff dwellers that we are, we do more fretting than anything else. Confronted with the prospect of something as life-altering as global warming, we cool our heels.
And distract ourselves. ABC got its highest Friday-night ratings in almost five years when more than 13 million viewers tuned in to see if Wallenda could make it from one cliff to another: a man at the mercy of the winds, a metaphor for the taking.