People who don’t live in Indiana may have been perplexed by Senator Evan Bayh’s recent vote for the President’s tax cut. After all, our junior Senator is–theoretically–a Democrat. He was also a governor for eight years, and ought to understand what virtually every credible economist in the country has been saying about claims that the President’s tax cut package will create jobs: If jobs are the goal, the best way to create them in the short term is to help the states out of their worst fiscal crisis since the Depression–a crisis that has been caused in large part by the economic and tax policies of this administration.
People who don’t live in Indiana may have been perplexed by Senator Evan Bayh’s recent vote for the President’s tax cut. After all, our junior Senator is—theoretically—a Democrat. He was also a governor for eight years, and ought to understand what virtually every credible economist in the country has been saying about claims that the President’s tax cut package will create jobs: If jobs are the goal, the best way to create them in the short term is to help the states out of their worst fiscal crisis since the Depression—a crisis that has been caused in large part by the economic and tax policies of this administration.
When the Bush Administration cuts taxes, local revenues plunge, because state tax codes are tied to the federal code. The Administration has also embraced devolution, sending programs back to the states. Devolution makes a lot of sense if funding mechanisms are devolved along with responsibility for the programs. That hasn’t happened (can we spell “unfunded mandate”?), so states are cutting services and laying off workers. These job losses are in addition to the two million jobs that have been lost since 2000.
Medicaid is the biggest problem. It was a huge problem when Bayh was in the Statehouse, only then the economy wasn’t in the tank. Today, without sufficient help from Washington, the dollars to fund Medicaid are being taken from streets and schools. State and local governments are trying to provide Homeland Security without the money that Bush promised, and without the promised federal action to safeguard ports, protect chemical plants and secure nuclear facilities. The list goes on.
In fact, the tax cut passed the Senate only because two ex-governor Senators concerned with the magnitude of the crisis extracted a concession from Bush. In return for their votes, the administration will send 20 billion dollars to the states. It isn’t nearly enough.
Evan Bayh spent eight years as Indiana’s Governor. Several years ago, a friend who ran a small state agency then told me a story that captured Bayh’s administration perfectly. My friend wanted to take advantage of a federal program that would have funded two workers to augment his small, overworked staff. There would be no cost to the state—the program even paid overhead. Bayh refused to add employees to the state payroll, even if the state wasn’t paying for them, because it might look as if state government was growing on his watch.
That carefully cultivated reputation for fiscal conservatism undoubtedly explains Bayh’s vote. But someone who has been a governor—even a caretaker governor—should understand that schools and public safety and roads and mental hospitals must be paid for somehow. Poor people get sick whether the federal government funds Medicaid or not. When they go to hospital emergency rooms, local taxpayers and patients with insurance will pay for their treatment—it doesn’t magically become free.
This administration is playing an unconscionable shell game. Evan Bayh should be calling them on it, not aiding and abetting it.