If the terrible toll wrought by fear of the Dreaded Tax Boogieman weren’t so serious, I’d probably be laughing at the timing of this whole “Challenges for Change” thing, since the newest Qunnipiac poll finds that the fear is entirely unfounded. It turns out that the American people, by a large margin, want the government to address the deficit by RAISING taxes on those with high incomes:

60 percent of Americans among both major political parties think raising income taxes on households making more than $250,000 should be a main tenet of the government’s efforts to tame the deficit. More than 70 percent, including a majority of Republicans, say those making more than $1 million should pay more.

This is important. If you’re in a position to influence what happens with “Challenges for Change” over the coming days and weeks, think about that – very carefully.  

When 1 in 5 eligible workers in this country is out of work or severely underemployed, another 2 in 5 are worried that they’re next. (There are some people who don’t worry – they’re either lucky ducks or not too bright.) That means at least 3/5 of the country  does not want you to shred the social safety net that’s dangling just over the edge of that looming unemployment precipice. They want to know that the people they elected to represent them are not going to abandon them to free-fall if the economy keeps shedding jobs. Bungie-jumping sans bungie isn’t in a lot of people’s master financial plans.

With votes coming up, and the end of session looming, those who represent us need to do all they can to represent all of us, not just the donor class at the top of the economic food chain.

People who need the services that are likely to be cut are typically one short step away from homelessness and destitution. The cuts being proposed are going to remove the last rung from the economic ladder. As Mark Horvath of InvisiblePeople.tv puts it:

Please always remember, the homeless people you’ll ignore today were much like you not so long ago.

The same is true for the people who are about to lose that last delicate thread of hope in this new great depression. They are our friends, our neighbors, and our families. “They” only morph from “us” to “them” when they skid off into the sidelines of the economic race course.

You know, when I first heard about “Challenges for Change,” something about the whole “Rush to Revamp Everything” felt … familiar. Side note: you’ve gotta hand it to Republicans, they’re The Masters of Naming Things.^TM If you need a rhyming or alliterative title, ask a Republican.

Anyway, it wasn’t that long ago that we were told there was a great, desperate need to very quickly commit to a radical “fix” to avert disaster. In September 2008, Congresswoman Marcy Kaptur discussed the “emergency” financial fix being proposed by the then-current administration:

“We need the right deal, not a fast deal. The White House is counting on fear to propel this Congress into hasty and inappropriate action … that is not in the interest of our Republic. There is a better way.” …

She was referring to the now infamous Wall Street bailout – the one that has done nothing to slow the collapse of Main Street USA. It hasn’t reduced the unemployment rate, it hasn’t kept Mom & Pop businesses from shuttering their doors forever, it hasn’t freed up credit for businesses, and it hasn’t slowed the foreclosure rate. In fact, all it’s done is separate the performance of the stock market from the performance of the larger economy, and enabled the architects of failure to reward themselves with billions of (our) dollars in bonuses, all while tying the hands of the current administration to do much of anything for ordinary people.

Perhaps not the best approach to take, eh?

It wasn’t long after the bailout vote that those who fell for the “OMG! PANIC!” tactics of Bush the Lesser realized they’d been “had.”

Sure, there was a big problem, and something definitely needed to be done, but it wasn’t exactly something that had never happened before, and we already had the tools (think: Sherman Anti-trust Act and receivership) to deal with the issue at far less cost and with far greater control.

So, what lessons did we learn from the Baby Bush Bailout Bonanza?  Sadly, it looks like we have learned nothing.

[over the fold]

In 2008, our country faced a significant financial crisis, and our President faced the final days of his administration. The traditional lame duck jokes wafted gently over the airwaves into America’s living rooms, and a silent financial problem simmered gently in the background.

This problem was well understood. It had been around for a loooong time, and warned about by professionals who knew their stuff. Those warnings were ignored – over, and over, and over again.

Until suddenly, just months before the end of term for the lame duck leader of our country, it became:

“A Very Big Problem That We Must Deal With Right Away, And Here’s What You Have to Do Right NOW!”

The plan was whipped out (with rushed input and undeserved blessing from a legislative branch that had been given too little time to fully vet either the issue or the “solution”), then put to a hurried vote just before a legislative recess.

In Vermont, we’ve had an eerie parallel. It’s the end of an 8 year term for our now-lame-duck Governor.  The Governor (Mr. “Government is too inefficient,” himself) has spent 8 years in office, proclaiming the woeful inefficiency of state government. In that whole time, he has clearly been aware of this simmering inefficiency, but he hasn’t done much about it – until, suddenly, just a couple of months before the end of his term, he called for an emergency revamping of entire state government from the top down.

Representative David Zuckerman called it a “shock troop” approach to government.

“The Governor talked about smaller efficient government for 8 years, but he didn’t make it his job to manage government. He didn’t do it methodically over those years, where there could have been much greater savings over that time. Instead he’s doing a sudden, fast process, at the last minute.”

Governor Douglas has used the financial problems faced by our state due to the economic downturn to create a sense of panic – pushing the legislature to rapidly make massive changes, without allowing time to ensure the proposed changes are the right changes to make.

As Representative Patti Komline said the other day:

“There’s a lot of confusion around this whole process. … We’re going to be expected to adjourn without, again, knowing the full impact of this, and we’re the ones who have to vote on it and answer to our constituents.”

The “this” to which she refers is massive. Every aspect of state government faces deep cuts, both this year and next. Departments will merge, school districts will change, the prison system will shrink, social services institutions statewide will merge and physically move to new locations. In short, the entire human infrastructure of our state will be rearranged in a grand tsunami of change.

In human services alone, one of every 20 dollars will be cut this year, and one out of every 10 dollars will be cut next year. Zuckerman says that rushing to make cuts in human services can have serious consequences:

“You don’t get a second chance with people’s lives. If you mess up with something environmentally, maybe it can recover over time, but with people … for example if a cut to something in mental health pushes a person into the legal system instead of a system of care, it will have an irreversible impact on that person’s life.”

Rushing through massive cuts in critical programs promises to hurt real people in very serious ways, and since these cuts are happening during a time when more people need help due to job losses, soaring insurance costs, and more, the cuts will hurt more people than would be hurt in a time of prosperity.

To top it off, the legislature’s role is severely hampered. In an ordinary budgeting process, there’s a budget and the legislature allocates appropriations and makes cuts based on those dollars – pretty straightforward. But that’s not how it’s going to work this time. This time, the legislature has to make cuts in programs, with little control over whether the money from a given cut will lead to a reduced budget –  because some cuts will really be shifts, redirecting money from one place to another. In addition, the legislature will have a limited ability to ensure that the shifting money goes where it’s supposed to go:

Unlike the normal budgeting process, in which lawmakers analyze the impacts budget proposals have on programs, under the Challenges for Change they do not have a direct say in how the money is removed and “reinvested.”

But there’s more. It’s not just bad for the most vulnerable people in Vermont, and it’s not just bad legislative precedent, the cuts in human services in particular aren’t even likely to be fiscally smart. According to the Public Assets Institute:

Because of the relatively high match rate in human services programs, Vermont could lose more in federal funds than it saves in state money.

…

The Challenges for  Change report promises to do more with less. But skeptics worry that both the administration and Legislature are counting their chickens too soon and booking the savings before they know what the cuts will mean to the delivery of services. When the implementation plans are unveiled, the administration should provide Vermonters with a full accounting of all planned budget reductions including those resulting from the loss of federal money.

That’s perhaps the most important piece of information among all the discussions regarding this topic:

Vermont cuts in human services funding may well be a double-whammy, because those cuts will be compounded by automatic federal cuts to those same services – and the result may mean a bigger hole in the budget than we started with.

This is a BIG DEAL.

And all the while, most of the legislature, afraid of the Dreaded Tax Boogieman, has stayed far, far away from the issue of raising funds. Zuckerman’s comment on the issue:

“We have a severe budget problem. Myself and a handful of others are willing to look at revenue changes, but that’s not the direction of “the chamber.”

“Where are the values? What are the values? This is the time when the battles ought to be fought.”

Maybe one day I’ll do a long discussion of the ludicrous “Laffer Curve” which is the economic altar to which conservatives bow each time they claim that the only possible answer to any fiscal issue is lower taxes. But I won’t do that now. Just suffice it to say that the current economic collapse is a direct result of that particular thinking.

Not everyone is afraid of the boogieman, though. As reported at Seven Days:

By and large, all the candidates said they would approach cuts in services much differently than has Gov. Douglas, though only one explained how the state might pay for making fewer cuts.

Sen. Doug Racine (D-Chittenden) said he believes the state must balance its budget by a mix of short-term tax increases, if necessary, spending down some rainy day funds, and making cuts as well as finding efficiencies.

“I don’t believe our values are negotiable just because we’re in difficult times,” said Racine to applause.

Speaking of those values, Nicole Mace, of Voices for Vermont Children, wrote a very informative opinion piece on VT Digger recently. In it, she made a point that holds true not only for education, but for all aspects of human services:

The Challenges for Change education “challenge” is based upon two false premises. The first is that education outcomes can be improved while spending less money. The second is that education costs are too high for the public to continue to support.

Let’s do a little experiment and remove “education” from the above quote:

The Challenges for Change “challenge” is based upon two false premises. The first is that outcomes can be improved while spending less money. The second is that costs are too high for the public to continue to support.

Here’s the crux: the Challenges for Change (for some reason, I keep wanting to write “Challenges for Chump Change”) premise implies that our problem is too much spending, and that the bare-bones basic services we offer to our community are therefore, somehow extravagant.

Challenges for Change implies that it’s extravagant to educate our children well, to feed the hungry, to help the sick, provide a place for the unemployed to find out about available jobs, and so on. Everything we supposedly value is an extravagance if you believe the premise of the program, and thus the only appropriate action is to cut.

But sometimes a cut doesn’t save what you think it will save. As Representative Susan Davis said in a recent forum (paraphrased) in Bradford:

After working for 31 yrs in state government, I know there’s been no short range or long range planning. We’re seeing the results of that lack of planning. While challenges for change is touted as cutting $38 million, I doubt we’ll actually see those savings. It’s an uncomfortable truth. …

Much of the discussion at the forum focused on program and tax cuts, but Davis’ response hints that the Dread Tax Boogieman is unworthy of that dread:

…in all the research I’ve read, I see no data that shows that raising taxes is actually detrimental when we’re in such hard times as this.

If raising taxes is the right thing to do, why do we hear so many people complain about taxes being too high? You know the system is very, very broken when we collect more tax revenues from people’s paychecks than we collect from all corporations’ profits, combined.

Is there room for more efficiency in government? Yes. There are some good concepts in Challenges for Change. It’s valuable to have each department revisit its mission and make sure that the things done by the department are designed to effectively and efficiently meet those goals. It’s a great idea for agencies to talk with other agencies and work on ensuring that if there’s data needed by both, there is an appropriate mechanism to share that data.

But to throw whole swathes of state government into chaos all at once, in some sort of a Hail Mary attempt to appease the tax cut gods? No. It’s ridiculous. I know the Republican party as a whole loves the idea of running government as a business. If that’s the Governor’s goal with this restructuring program, then let’s hope he never runs a business, because anyone who has been though a massive business restructuring will tell you: once the restructuring process starts, everything goes “kerflooey” (yes, that’s the technical term). Suddenly most employees have to divide their time between figuring out who’s the new “go to” person for, well, everything, while simultaneously trying to juggle the work that was already on their plate, and for which they barely had time to begin with.

When a company is restructured, everything slows down, customers end up very unhappy, and very little gets done until well after the dust settles – often restructuring ends, ultimately, in the company’s failure. What will happen if our state undergoes a massive, poorly planned restructuring? Failure will have disastrous human consequences.

Let us hope that the legislature is smart enough not to fall for the Governor’s “me too” attempt at shock doctrine governance. Let’s hope they find ways to fill the budget hole without throwing the state into chaos, at a tremendous and painful cost to ordinary Vermonters.

I’ll close by borrowing from Sue’s terrific diary on the hidden time bomb in the proposed Challenges for Chump Change permitting process:

Contact your legislators. Tell them you’re paying attention; tell them what you think of the “Challenges for Change” agenda in general; and remind them once again that their first obligation is to protect their constituents.

House of Representatives

Senate

And the sergeant at arms number for phoning messages into the statehouse: (802) 828-2228