Note: this is a cross-post from my group-blog, The Realignment Project. Check it out, and if you see something you like, pass it on!

In thinking through my recent post about the California budget mess, and in following the politics of what is now the second full round of budget negotiations this year, one of the frustrating elements of budget politics (at least for progressives) is the lack of connection in the minds of the electorate between taxes (which they generally dislike or can be persuaded to vote against, although as progressives have pointed out, this is not always true) and spending (which they generally like, in pretty much all cases). Even though it’s impossible to increase spending on public priorities, cut taxes, balance the budget, and decrease borrowing at the same time, voters apparently would like to do just that.

The problem for progressives, though, is that this makes it very difficult to raise taxes, even when it’s going towards public policies that are really popular. Which is why I was pleasantly surprised to see the California state legislature ’s Budget Conference Committee increase the VLF (Vehicle License Fee) to save the state’s parks from being shuttered. Not only was this good in and of itself – parks are a public good that people should be able to enjoy, closing the parks loses a lot more in tourist revenue than it saves n parks dept salaries and maintenance costs – but it was also a rare case of a tax increase that’s explicitly targeted to a public policy. Henceforth, the debate over increasing the VLF, which was one of the factors that brought down Gray Davis and brought in Arnold Schwarzenegger, is no longer just a debate over whether taxes should be higher or lower, as the Republicans would prefer. Now it’s a question of which is better, $15 less on your VLF or state parks – and that’s a debate we can win.

Targeted taxes and special funds are a very wonky area of public policy that I think is criminally under-emphasized in progressive circles, precisely because these two things do the impossible: they directly link taxes with the programs they finance. Targeted taxes are something that people are generally familiar with – gas taxes generally fund transportation, cigarette and alcohol taxes generally go towards health care – but only on a small scale.  Likewise, we’ve all heard of special funds – budgetary pots of money that are reserved for specific policy purposes  – like the Social Security Trust Fund, I think that one way to solidify progressive taxation would be to sub-divide existing progressive taxation (income, property, inheritance taxes, capital gains, etc.) into separate targeted taxes: a Health Care Tax (made up of 1/xth of current income taxes, 1/xth of capital gains taxes, etc.), an Education Tax, a Public Transit Tax, and so on. Each of these would go into a Health Care Fund, an Education Fund, and so on.

In a purely technical sense, this is just accounting gimmickry, since the state’s General Fund and its different budget areas essentially do the same thing. But in a political sense, this has the important effect of dis-aggregating general taxes which fund the abstract entity known as the government, and making our policy priorities visible and concrete, forcing people to think about the ends of public finance. Now instead of railing against taxes that are too high and wasteful spending int he abstract, which conservatives love to do because it allows them to mobilize people’s dislike of taxes without running afoul of people’s approval of specific government spending, conservatives would be forced to argue for cutting specific taxes that fund specific programs. Now instead of having to defend the abstract principle of government and the take-your-medicine argument for the necessity of taxes, progressives can go out and say “we want to expand health care coverage, lower college tuition, and put solar panels on every house in California – so go out and vote for an increase in the Health Care Tax, the Education Tax, and the Environment Tax.”

In a sense, what this would do is to take the chaotic process of ballot-box-budgeting, where priorities are set randomly, without a view to the overall picture, and bring it into the legislature in a way in which public priorities can be debated, voted on, then presented to the voters. This would also allow the legislature to explain in a absolutely straightforward way what they did and why, and sell the budget as a progressive document to the electorate.

The image above is an example of how this could change the politics of budgeting – it comes from a 2002 Washington State Budget, and even though the idea for it came from a group of Third Wayist policy advocates who I dislike, I think the idea can be repurposed for genuinely progressive ends. Because what this does well is to break down the health care budget into what it actually covers, and shows the implications for increasing and decreasing spending – and there, progressives can use the public’s support of social policy ends to our advantage – by showing that budget cuts (and therefore, tax cuts) would mean cutting off X number of people, or shuttering programs A, B, and C, or cutting back on quality of services. And here again is a debate we can win.

Note: this is a cross-post from my group blog, The Realignment Project. As California grapples with the Herculean task of trying to solve its budget crisis, there’s a sense of complete impasse on what to do – Republicans won’t vote for tax increases, there isn’t enough space in the budget to cut without eliminating some fo the basic functions of government, the governor won’t sign off on a majority budget. There’s been suggestions that the state could get some sort of financial backing from the Federal government, either in the form of a stimulative infusion to fill up the $24 billion gap, or in some form of a guarantee of California’s bonds so that the state can borrow money for routine cash needs without having to pay exorbitant interest rates, and hopefully so that the state can re-start its stalled public works projects (including the High Speed Rail line that was voted in back in 2008). Politicians, pundits, and the public from other states have reacted negatively to this trial balloon, arguing that California is responsible for its own fiscal crisis and that it would be wrong to help one state and not the other. In essence, the reaction is “this isn’t our problem, we shouldn’t have to pay to fix it.”

However, I’m going to argue that it actually is all of our problems, that we are all in the same boat, and that there’s a way to fix it.

To begin with, it’s important to recognize that California isn’t alone; other states are in a similar predicament. As Robert Cruickshank over at Calitics notes, most other states have experienced the same fiscal shock we’ve encountered. Personal income tax revenues are down in 37 states, corporate income tax revenues are also down in 37 states (although it’s not always the same 37 states), sales taxes are down in 29 states. This doesn’t even include property tax revenues, which have been badly battered by the collapse in housing prices. 29 states saw declines in all three areas. While California, by virtue of its size, is in the deepest hole in dollar terms – many other states are in similar trouble. New York’s income tax revenues have fallen by virtually 50% and has been dealing with a $17.7 billion deficit, and Alaska and Nevada are facing a 30% budget gap between revenues and budgetary requirements. This is not a state-level phenomena, it’s national – and if you look at it all together, it’s a $120 billion dollar deficit that we have to fill.

The larger problem is that we’re in a recession and state governments can’t print money to pay their bills, can’t deficit spend due to state laws (usually constitutions), and the bond markets aren’t really snapping up state debt and are charging an arm and a leg to do so. This means that while the Federal government is trying to push a stimulative policy and get the money pumping, the state governments are going to undercut recovery efforts – the Federal stimulus package is about $350 billion/year, and that $150 deficit will cut the effect nearly in half. This policy problem is being compounded by a political problem – bond rating agencies and the bonds markets are ideologically going after public credit ratings. As John Quiggan notes, agencies like Moody’s, Standard & Poor’s, and Fitch which were up to their necks in the current financial crisis, who looked the other way and stamped AAA ratings on garbage CDOs and asset-backed-securities and credit swaps and other financial snake-oils are now aggressively targeting the bond ratings of government entities. While Quiggan’s examples are mostly Australian, you can see the same thing happening in the U.S as states and even the Federal government (all of whom maintain the power of taxation as a guard against permanent insolvency) are being warned or downgraded for actions that are vitally necessary to save our economy. By itself, by shifting state spending away from stimulative spending towards financing higher interest rates and by forestalling the potential for Keynesian borrow-and-spend policies, these agencies are making the crisis worse. Moreover, by pushing the ideological line that balanced budgets are better than increasing spending, they are complicit in the shock doctrine proselytizing going on in state governments (such as in California, where Swartzenegger used the budget crisis to push for the elimination of the state’s SCHIP program, the Calgrants college aid program, and the Calworks welfare program).

So how do we, and by we I am referring to the national progressive movement and our political allies in government, prevent this crisis being used to gut government and exacerbate the recession? I think the solution is that the Federal government needs to either buy or guarantee economic recovery bonds, which would be specifically targeted at rehiring fired public workers and paying existing salaries, for maintaining/expanding funding levels for social services, and for public works. In a sense, this would be Stimulus 2.0, allowing President Obama and his team to accelerate recovery by turning the states from a pro- to counter-cyclical force. More importantly, by creating a new policy mechanism for preventing pro-cyclical spending cuts and tax increases, this would provide a policy tool for future generations, turning the states from a lead weight on the economy in recessions into local engines for Keynesian recovery.

Note: This is a cross-post from my blog – http://work-in-progressadminis…

Given that the current ballot propositions have gone down in flames, then the state of California faces a brand-new budget crisis of some $21.3 billion. While obviously the Democratic leadership has focused their attention on trying to pass the ballot measures they thought represented the best possible compromise, I do hope that some thought has been given to what the new strategy will be on 5/20. Granted, the imperatives of political strategy mean that it’s more than likely that there is a Plan B that’s being kept under wraps at the Legislature, At the same time, however, it is vital that California Progressives come together to construct a stronger coalition and a winning strategy for the future of our state.

One potentially hopeful sign is that it appears that California may seek some sort of Federal bailout, either in the form of Federal fiscal aid or in Federal guarantees for California’s bonds. The danger that progressives have pointed to is the possibility that Gov. Schwarzenegger will use this crisis to push for additional spending cuts, deregulation of environmental and labor protections, and other regressive pet projects.

Obviously, this would be catastrophic, both for California and for the nation. The Obama Administration must resist the Governor’s request for “the right to make the cuts we need” – if for no other reason than pure self-interest. There is nothing to be gained from placating a Governor who has no political future in his or any other party, whose approval ratings are through the floor, whose administration has become a byword for failure, and who has nothing to offer the administration. Obama’s political and policy interests converge in a successful economic recovery achieved through Keynesian stimulus; his interests in a California bailout would be to ensure that the Largest state in the Union and the world’s 10th largest economy does not become a massive deflationary weight on the American economy. Acceding to further spending cuts, further job losses and furloughs, and especially to programs like Medi-Cal that benefit the poorest Californians (who as Keynesian theory reminds us have the greatest “marginal propensity to consume”) would only serve to damage his own stimulus plan and slow the pace of recovery.

California Progressives at every level, from Senator Boxer on down to the Party Central Committees, local grassroots groups, and veterans of his 2008 campaign should absolutely lobby the President to ensure that any bailout is conditional on A. a reversal of prior cuts and firings and a commitment to pro-stimulatory policy, and B. Schwarzenegger’s commitment to signing a new majority-vote budget written up solely by Democrats using the “Steinberg maneuver.”

However, even this victory would be a mere cauterizing of the wound. If nothing else, the defeat of the May 19th propositions must show all members of the Progressive coalition that we cannot continue on the current path of division and drift – we must unify around a comprehensive strategy for confronting the crisis of governance once and for all in 2010, a new way forward.

To begin this process, we should start with a few fundamental strategic principles:

1. Aggressive Partisan Use of Majority-Vote

Progressives tried and failed to abolish the 2/3rds rule before. While we must absolutely put every resource we can into its abolition in 2010 (including putting abolition front-and-center in the 2010 Democratic Platform, making it a litmus test in the gubernatorial primary, and creating a narrative of constitutional reconstruction around it), our commitment to functioning democratic government must come first. Which means no matter what happens in the future – whether we pass an initiative or don’t, whether we get to 2/3rds control of the legislature or don’t, whether we get control of the governor’s mansion or don’t – that Democrats aggressively use the “Steinberg maneuver” to right the fiscal ship and get California voters accustomed to seeing majority budgets. This may very well mean strong-arming the governor, and potentially using our allies in the Federal government to provide additional leverage, but I see this as a crisis of democracy. Either the people rule in the state of California, or they don’t, and we cannot allow a minority bent on the bankruptcy of the government to succeed.

At the very least, let’s try – even failure would be better than doing nothing.

2. Creating a Progressive Foundation For the State’s Finances

There’s been a tendency in recent years for Democrats in the state legislature to nibble around the edges when it comes to raising revenue rather than going for comprehensive solutions. We can’t afford to delay any longer. Democrats need to think more creatively about revenue generation, and about how to create progressive narratives around revenue and spending – even if it means going after corporate taxation and tax breaks in a major way. A good first step would be something like establishing an oil excise tax and putting the revenue into a higher education fund (simultanteously opening up more space in the General Fund) – thereby tying a tax on companies people don’t like to a cause that people do like. Similarly, I think tying a cut in residential property tax rates to an increase in commercial property tax rates – and tying that revenue towards California’s various green-housing ventures would also create a positive narrative that frames progressivization of the tax code in a personal and approachable way – do you favor cutting your taxes and raising more money for green housing, or protecting rich corporations?

Above all, we cannot let the debate over government taxing and spending be conducted at an abstract level that allows conservatives to milk voters’ mixed feelings of resentment of taxes and apathy towards paying for services they want. At all times, the means (taxes on X) must be connected visibly to the end (spending on this program). We must learn to do that, not just for budgeting-by-ballot initiatives, but for the entire General Fund.

3. A Universal and Comprehensive Approach to Social Spending

Which brings me on to our next issue – the tangled nature of our state’s social spending, a mixture of regular General Fund spending and special initiative funds. It’s incredibly opaque, and makes it very difficult to understand what’s going on, plan or coordinate, or to mobilize people around an ultimate goal for social spending. My current vision is that we should create unified social Services to centralize our competing and divided programs, and to create the administrative capacity for future progressive efforts. For example, a California Health Service to combine Medi-Cal, Prop 10’s funds, and other programs, not only to improve coordination of current efforts, but also to create the state capacity for single-payer health care in the future. (After all, the British NHS required the prior establishment of the war-time Health Services who developed the expertise in nation-wide public health delivery). Moreover, a Health Service would allow taxation to be linked closely to spending, which would in turn be linked to public policy goals: “support bill/proposition X to increase revenue for the Health Service, to help move California towards universal health care,” or “support bill/proposition Y to increase revenue for the Education Service, to reduce drop-out rates in half in five years.”

Thus, the narrative of government is complete, from the tax, to the program, to the program’s intended results. That way, debates over government shift from the conservatives’ favorite territory of how big or how small or how efficient or wasteful to questions of which social goals we want to achieve.

4. A Unified, Party-Driven 2010 Campaign

In order to achieve all of this, we need to avoid the kind of factionalized intrigue and infighting that has sapped and dispersed the strength of the California Progressive movement – this means getting every group on board, including all of organized labor, all of the Latino groups, all of the African-American groups, all of the Asian-American groups, all of the progressive groups, all of the women’s groups, all of the GLBT groups, and all of the electeds in the same coalition.

And just as importantly, it has to be centralized within the party. Every election cycle, we run into the same program of groups trying to re-invent the wheel by forming new coalitions, building up their own voter and donor databasers, running their own ads, doing their own GOTV. It’s a massively wasteful duplication of effort, and it often means that politics becomes less democratic, as power is pushed upwards into the executive boards of temporary organizations that are unelected and not responsible to their constituency; it also means that official Democratic Party politics is diminished by the inattention of the progressive forces within the party, leading to capture by electeds and candidates and the devolution of what should be principle and policy-based politics into personality-driven politics. Hence the need for all groups to stake a common claim to a party organization that is, for all of its faults, visible, elected, and responsible to local Democrats.

This is not an easy thing to ask – it means giving up autonomy in favor of collaboration and compromise; it also means a genuine embrace of solidarity. Solidarity is a word that gets tossed around a lot in labor circles, sometimes genuinely, sometimes as a genuflection to a timeworn idol, and sometimes as cover for more complex politics. It’s also something so deep in the bones and blood of the labor movement that it becomes almost an inexplicable article of faith – a shibboleth that separates those of the House of Labor from our uncomprehending allies. But what it ultimately means is a commitment to an other-directed politics, to the recognition of a wider moral commonwealth, an almost-spiritual oneness of need and humanity and frailty between disparate and remote groups of workers. It means being willing to march in a picket line and get your head beaten on for a different union’s drive, for workers you may never have met before – because you recognize your struggle in theirs, and know implicitly that they’d do the same for you. It means refusing to cross a picket line even when it might hurt your pocketbook because crossing that picket line would be a betrayal of that part of yourself you see in other people.

It’s a tough concept to live up to, a sort of discipline. And it’s something that various factions of the Democratic Party need to understand and make a part of your life. It meets that Progressives – who are often whiter, richer, and maler than other members of our coalition – have to instinctively recoil from anyone who calls labor a special interest, because labor would do the same for them when conservatives attack them as anti-American. It means that African-American groups need to instinctively support GLBT groups on issues like Prop 8, not because the African-American community is morally obliged to be the conscience of the nation, or because they’re required to accept any group’s claim to similarity to the civil rights movement, but because they recognize GLBT Californians as part of a coalition for a broader conception of civil rights for all. And on and on, each group must be willing to put the interests of their peers at a level with their own, and the interests of the coalition above all else.

And this won’t happen unless the center of a unified, party-driven campaign is a progressive platform that fully incorporates the major drivers of all constitutive elements of the party. That means not just Abolition of 2/3rrds, but also Repeal of Prop 8, and so on, so that each group feels that its political objectives can best be met by the enactment of the party platform, creating the level of trust and confidence necessary for concerted action and true solidarity.  

( – promoted by Robert in Monterey)

NOTE: Cross-posted from Daily Kos.

Yesterday, I posted a diary about possible ballot petition fraud going on in Santa Barbara, California related to the Electoral College Initiative that seeks to split California’s electoral votes by congressional district.

There have been some developments, so I’ve decided to post an update.

After I had gotten the initial word out about this, I got a call from the reporter at the Daily Nexus (UC Santa Barbara’s student newspaper) about what had happened, and then a second call, and then I sat down for an interview.

So here’s what I learned: when the reporter went herself and asked a bunch of questions, the petition gatherers actually described the titles of the three other initiatives. However, when she sent more reporters to “play dumb” and not ask any questions, the petition gatherers said nothing. Hence, the push to get people to sign ballot initiatives they’re unaware of seems to be operating on a “don’t ask, don’t tell” basis.

When they sent yet another reporter to directly interview these petition gatherers, the gatherers got rather close-mouthed, wouldn’t give their names for the record, etc. But they did say that they were working for “APC” and gave a website for their company.
http://www.apcusa.co…

APC turns out to be Arno Political Consultants, a well-established conservative petition group founded by Mike Arno in 1979. Some of their  former and current clients include Wal-Mart, Phillip Morris, R. J. Reynolds, Procter & Gamble, Kodak, Occidental Petroleum, Mobil Oil, AT&T, and America Online.
http://en.wikipedia….
http://www.ballotped…
http://www.ballotped…

This petition firm has a long history of getting involved in similarly unethical behavior, such as:
– tricking college kids into registering as Republicans in Florida.
http://www.sptimes.c…

– telling California voters that the Electoral College Initiative was actually an anti-war ballot initiative.
http://www.mercuryne…

– telling Massachusetts voters that an anti-gay-marriage ballot initiative was actually an initiative to allow selling wine in grocery stores
http://www.massequal…

Most importantly, APD has been hired by David Gilliard, Ed Rollins, and Anne Dunsmore, the proponents of the Electoral College Initiative.
http://pqasb.pqarchi…

As for who those pleasant people are:
http://steveaudio.bl…

——————–

So, what’s the conclusion here?

One, I don’t know if APC tells its workers to commit fraud or doesn’t. All I can say is that they have done this kind of thing in the very recent past.

Two, this is not an issue of some third-party or fourth-party signature gatherers who don’t know who they’re working for, and who are unknown to the proponents of the initiative. These people know they’re working for APC, and APC has been hired by the proponents of the petition.

Three, given the fact that they seem to have a consistent policy of not telling people what they’re signing if they don’t ask, I don’t think this is accidental.