Walter Lippmann was the foremost pundit of his time, which was the fifties and sixties. In 1955, he published a book called The Public Philosophy. It is a dark and gloomy treatise, more despairing than cynical, about the inherent flaws of democracy and government's inability to act wisely. I first encountered it as a freshman at Rice, and I probably hadn't thought of it in fifty years, until I went to the Article II Appropriations committee yesterday. Here were a group of decent people--legislators, bureaucrats, staff--all wrestling with the problem of the lack of funding for Medicaid, and all of us knew that it was totally futile, that little or nothing would be, could be, accomplished. The House proposed budget contains $2.9B in savings that can be used to draw down federal funds. After that, well, Commissioner Suehs mentioned various possibilities for saving money--$20 million here, $4.5 million there, and other minuscule amounts. Do you know how many twenty millions you need to get to a billion dollars? Answer: fifty.
And now, a voice from offstage. The voice belongs to one Horacio Aldrete-Sanchez, a credit analyst for Standard & Poor's, a well known bond rating house. “We believe," wrote Aldrete-Sanchez, about Texas's approach to its budget woes, "that a balanced approach that includes both revenue enhancements and expenditure cuts has a higher potential of success in preserving the state’s long-term structural budget balance than a strategy that relies solely on expenditure cutbacks." Why should anyone care what S&P thinks? Here's why: As we all know, rather than raise revenue, Texas in recent years has gone on a borrowing spree. Bonds for highways. B0nds for equipment. Bonds for curing cancer. Unfortunately, the day comes when debt service on those bonds must be paid to the bondholders. If the bond rating agency doesn't think much of the way a state handles it finances, it downgrades the state's bonds, which usually means that the cost of debt service goes up.
Aldrete-Sanchez is clearly right. The refusal of Texas's leaders to raise revenue is imperiling the state's fiscal stability. We raise money only by the most expensive means--borrowing. Our revenue and tax structure is untenable. We have a nonperforming business tax that has created a permanent structural budget deficit, and our state leaders, who have known about this since 2006, when they paid no heed to the comptroller's fiscal note, continue to pretend that it doesn't exist.
What does all this have to do with Walter Lippmann? It so happens that The Public Philosophy contains a well known passage that seeks to define the malady that afflicts modern government:
With exceptions so rare that they are regarded as miracles and freaks of nature, successful democratic politicians are insecure and intimidated men, They advance politically only as they placate, appease, bribe, seduce, bamboozle, or otherwise manage to manipulate the demanding and threatening elements in their constituencies. The decisive consideration is not whether the proposition is good, but whether it is popular--not whether it will work well and prove itself, but whether the active talking elements like it immediately. Politicians rationalize their servitude by saying that in a democracy, public men are servants of the people.
This devitalization of the governing power is the malady of democratic states. As the malady grows, the executives become highly susceptible to encroachment and usurpation by elected assemblies; they are pressed and harassed by the higgling of parties, by the agents of organized interests, and by the spokesmen of sectarians and ideologues. The malady can be fatal. It can be deadly to the very survival of the state as a free society if, when the great and hard issues of war and peace, of security and solvency, of revolution and order, are up for decision, the executive and judicial departments, with their civil servants and technicians, have lost the power to decide.
This is all too accurate a description of Texas politics today, particularly the first paragraph. I have never seen so many lawmakers so scared. Insecure and intimidated men (and women) indeed. Republicans in particular live in fear of their own base. I have seen so many members who I respected in the past fall all over themselves to sign on to immigration bills, abortion bills, anything to defend themselves from the pack that is howling for red meat. So great is the fear and the fretting that the Legislature would rather cut spending for public education, something that has not happened in modern times, than raise new revenue. It would rather let federal matching funds for Medicaid stay in Washington than raise revenue. Lan Bentsen, son of the late senator, representing the Children's Defense Fund, proposed to the House Article II subcommittee a two-cent increase in the sales tax for two years, to be sunset thereafter, to fund Medicaid. Members studied the console in front of them in silence, knowing what is going to happen. Nursing homes will close. Babies will die. Sick people will go to the emergency rooms for treatment, the burden will fall on the local property taxpayer, and lawmakers will congratulate themselves on not having raised state taxes and snookering the public again.
I would prefer that Texas not raise taxes. Who wouldn't? But when new revenue is off the table and the budget is permanently burdened with a structural deficit that will increase every year, and school districts across the state are having to close schools, the course we are on is crazy.
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