Tag Archives: California budget crisis

The New Attack on Democracy: What the Founders Knew But We’ve Forgotten

constitutionOne of the foundational principles of American democracy is under attack.

When the nation’s Founders crafted the United States Constitution in 1787, they were careful to include a requirement that:

“The Senators and Representatives shall receive a compensation for their services, to be ascertained by law, and paid out of the treasury of the United States.” (Art I, Sec. 6, Clause 1).

A similar provision for compensation applies to the president:

“The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be increased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.” (Art II, Sec. 1, Clause 7).

The Founders understood that providing compensation for the new government’s elected officers was not a trivial matter, but an essential and cutting edge principle of the new democracy that they were striving to create — and one that directly and profoundly affected the kind of people who would be willing and able to serve as representatives of the people.

They knew too that no other nation on earth insisted on compensation for its elected officials.

In England, members of parliament as a rule served without pay.  In colonial America, candidates for public office usually followed the practice of their English counterparts and promised to serve without compensation.  In the states themselves, only Pennsylvania provided for “wages” from the “state treasury” to “all lawmakers.”

The Founders knew that this English aristocratic practice of not paying public officers created an enormous disadvantage for less wealthy candidates who could not afford to serve without receiving an adequate income for their efforts.

The Founders did not want public service to be a genteel avocation reserved for men of independent wealth, as it was in England, but wanted instead to create a system in which – as James Madison said – public office would be open to “those who have the most merit and least wealth.”

Fueled by the rhetoric of anti-government and anti-egalitarian demagogues (mostly in or allied with the Republican Party), this foundational and deeply American egalitarian principle is now under attack in this country – especially in California, where voters are responding to the state’s budget crisis by cutting the salaries of legislators and city officials, and where our billionaire governor constantly rails against legislative salaries and supports a 10 percent pay cut in legislative compensation.

But as the Founders knew – and we clearly have forgotten – adequate compensation for public officials is an essential element of a democratic government.

Cutting the salaries of public officials will mean that only the rich will able to serve – and when only the rich can serve, we will have the opposite of the government that Madison envisioned – one in which our representative have “the most wealth and the least merit.”

The Founders would not be pleased that the people are now so willingly – even eagerly – abandoning one of the fundamental principles of the American democracy that they fought to create.

Democrats Should Be Joining the Tea Parties

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Democrats are responding to the growing nationwide phenomena of anti-tax “tea parties” protests by mocking them and by pointing out that they are prompted and run by right-wing organizations.

Neither response is a winning political strategy.

It is pure political stupidity — and bad economic policy — for Democrats to treat the tax protests with derision or contempt.

Rather than mocking the aims of the tea parties, Democrats should follow the lead of presidential candidate Barack Obama, who promised to “provide a tax cut for working families” and “restore fairness to the tax code and provide 95 percent of working Americans the tax relief they need.”

Obama also promised to provide tax relief for small businesses and startups by  eliminating “all capital gains taxes on startup and small businesses to encourage innovation and job creation.”

What Obama recognized – and Democrats already seem to have forgotten – is that working families are in fact being over-taxed while the super rich have gotten a free ride – and that voters will cast their ballots for the party and the candidates who they believe will create a fairer tax code and reduce their tax burden.

And while it is certainly legitimate to point out that the anti-tax tea parties are being manipulated and guided by right-wing groups and talk-show hosts whose agendas are not the same as working and middle class voters, this point is devoid of political impact unless it is accompanied by a commitment to do a better job than these groups of protecting working class and middle class economic interests.

For too long, Democrats – especially in California – have allowed Republicans to dominate and set the terms of the tax debate.

As a result, Democrats have allowed Republicans to paint them as the party of higher taxes – and have allowed the super rich to pretend to defend the economic interests of working families and the middle class while in fact shifting the costs of government to those who are least able to afford it.

Instead of responding to the tax protests with mockery and contempt, Democrats need to insist on talking about the kinds of taxes that the government imposes and who pays them.

We should insist that all taxes be progressive and focused on overturning the Republican’s outrageous favoritism of the super rich.

Especially in the midst of the current recession, we should oppose any increases whatsoever in regressive taxes – such as the sales tax, the automobile tax, and the gasoline tax – that disproportionately hit working and middle class families, unless and until the state and federal tax code is revised to require that the super rich pay their fair share.

Of course these tax protest “tea parties” are a Republican sham — the Republican anti-tax activists not interested in reducing the tax burden on the middle class and working families, but in keeping the Bush tax breaks for the rich — but that does not mean that the underlying middle class protest — even rage — at their tax burden should be ridiculed. On the contrary, it means that the Democrats should insist on seizing the debate and turning it against the Republicans — as Obama did.

Democrats can win the tax debate – if they take the tax protest “tea parties” seriously.

Related posts:

Why I Love Conservative Talk Radio’s John and Ken Show

The Charge of the Democrat Light Brigade: California Democrats Caught in Republican Tax Trap

Why the Republican Anti-Tax Movement Doesn’t Care About the Taxes that YOU Pay

The Charge of the Democrat Light Brigade: California Democrats Caught in Republican Tax Trap

charge-of-the-light-brigade-posters2Half a league, half a league,
Half a league onward,
All in the valley of Death
Rode the six hundred.
“Forward the Light Brigade!
Charge for the guns!” he said.
Into the valley of Death
Rode the six hundred.
— Alfred Tennyson, The Charge of the Light Brigade.

Like the Russians did to the British at Balaclava in Tennyson’s famous poem, California’s Republicans have set a deadly trap for Democrats that they won’t be able to escape.

When the state’s more than $40 billion shortfall and budget stalemate was resolved last month, it was on condition that several tax increase propositions — most notably Prop 1A — be placed before the voters.  Governor Schwarzenegger has set May 19, 2009, as the date that the voters will decide the fate of these propositions in a special election.

Schwarzenegger and the state Democratic leadership support these tax increase propositions.

The Republicans – who acquiesced in both the budget and its tax increases by permitting the minimum number of their party members to vote for the deal that ended the stalemate – are now likely to oppose them.

Joining the Republicans in urging that voters reject the tax increase propositions will be the state’s powerful and well-funded anti-tax organizations, including the Howard Jarvis Taxpayers Association and Grover Norquist’s Americans for Tax Reform.

As a result, the voters will see an intense, expensive, and high publicity campaign leading up to the May 19 special election that pits Democrats (and their union allies) arguing for higher taxes against Republicans (and their anti-tax allies) calling for no increase in taxes.

Once again, the Republicans will be the party saying no to taxes and the Democrats will be forced to be the party of tax increases.

To most voters, it will not matter that the budget deal was explicitly premised on the state getting the increased revenue from these taxes.

Nor will it matter to the Republicans that they tacitly agreed to these tax increases when they signed off on the state’s budget.

Instead, the Republicans will seize the opportunity of the special election to make amends to the state’s anti-tax forces – which are mad as hell at them for agreeing to the state budget – and to paint the Democrats – once again — as profligate spenders who want to tax Californians to death.

To make matters worse for the Democrats, the propositions that are going before the voters on May 19 are mostly hikes in regressive taxes and state fees – including increases in the state’s income tax, sales tax, gasoline tax and vehicle fees – that hit middle class pocketbooks hardest.

Again, it will not matter to voters that it was the Republicans who insisted that if the state’s revenue is increased, it be increased by the most regressive kinds of tax measures.

Nor is it likely to matter to voters that for decades the Republicans and the state’s anti-tax forces have forced the middle class to bear the brunt of the state’s revenue needs because of Prop 13’s constitutional command not to tax commercial or business property differently than owner-occupied homes, and the Republicans’ steadfast commitment to protecting the rich by opposing any form of progressive taxation.

The reason that these facts are unlikely to matter to voters is that the Democrats have done a terrible job of making these arguments in the past, and specifically failed to make these arguments during the heat of the most recent budget battle.

California’s Democrats should have taken their cue from the Obama campaign and insisted that the state’s already battered middle class be protected from any tax increase.

And like Obama, California’s Democrats should instead have called for balancing the state budget through higher taxes for the very rich who have benefited so disproportionately from both the Bush tax cuts and the financial deregulation that has led to our national economic crisis.

But it’s probably too late to do that now.

The tax trap is set.

And California’s Democrats are riding right into it.

Four Obama Inspired Lessons for California Democrats – Part Two

obama-the-teacher1

Last week I wrote that the Obama campaign should serve as a master class in winning elections for Democrats, but, unfortunately, not enough California Democrats are playing attention to the Obama campaign’s most important lessons.

These Obama inspired lessons are:
1. Blame Republicans and Present a Democratic Solution
2. Use the Internet
3. Expand the Electorate
4. Champion the Middle Class

I’ve already discussed the first two of these lessons, pointing out that during the state budget fiasco, the Democratic leadership failed to place the blame for the crisis squarely on the Republicans, and failed to present a clear Democratic solution to the state’s budget and economic problems.

I also pointed out that although the Internet is a potential game changer for California Democrats – as a less expensive and far more effective alternative to the Republicans’ expertise in direct mail – we have failed to capitalize on this advantage by building effective, informative and user-friendly websites, as well as building membership in Democratic groups on social networking sites such as facebook.

The importance of the Internet and its related technologies was underscored last week when the California Republican convention made improvement in their use of technology a primary objective.  The California Republican Party website now promises that their “Technology Leadership Committee is racing ahead bringing together leaders in California’s tech community to help make our state party the national leader in the use of new and emerging technologies in our operations and communications. The initiative is chaired by David Kralik of Newt Gingrich’s organization.”

This means that California’s Republicans are well aware of the devastating effect that Obama’s edge in technology and Internet use had in the last election, and are racing — and spending money — to catch-up.  Democrats cannot let this happen.

The remaining two Obama inspired lessons are:

3. Expand the Electorate
4. Champion the Middle Class

Let’s tackle them now.

3. Expand the Electorate

si-se-puedeThe Obama campaign succeeded in large part because it expanded the Democratic electorate by bringing far larger numbers of young people, students, and immigrant groups into the process than ever before.  Obama specifically targeted these groups and the result was millions of additional votes.

The California Young Democrats movement is doing a terrific job of maintaining the momentum of the Obama campaign and getting young people involved in the state Democratic Party.

Where we are falling short is in regard to immigrant groups.

Amazingly, here in Southern California, few election campaigns outside of Los Angeles and Santa Ana provided literature, emails, or websites in Spanish.

The website of the California Democratic Party has nothing in Spanish.  The website of the Democratic Party of Orange County has only a single half-page in Spanish.

Neither website has anything in Farsi, Vietnamese, or any of the other languages of California’s immigrants.

This must change.  We need to create Democratic Party literature and web materials in Spanish, Farsi, Vietnamese, and other languages.

We also need to campaign in predominantly immigrant and less affluent neighborhoods.

Despite the fact that so many Mexican immigrants in Southern California live in apartments, our Democratic candidates have tended to campaign only in areas of private homes, entirely ignoring apartment complexes.

While I’m aware of the problem of scarce resources, it seems to me that we cannot continue to fail to campaign directly to hundreds of thousands of potential voters, especially those who tend to vote overwhelmingly Democrat.

4. Champion the Middle Class

Throughout the presidential election, Obama positioned himself as the champion of the middle-class and painted his Republican opponent as the champion of the very rich.

foreclosure_1009_rp25_lrgObama also made middle-class tax cuts a centerpiece of his campaign promises.  The result was millions of votes from the suburban middle-class -– and electoral vote victories in states that had long gone Republican.

The suburban middle-class that tipped the electoral scales for Obama is probably the single most important voting group in California – especially in Southern California.

Yet despite Obama’s lesson, our local Democrats continue largely to ignore the middle-class, and related groups such as homeowners and small business owners.

In fact, I could not find the word “middle-class” anywhere on the websites of either the California Democratic Party or the Democratic Party of Orange County.

How can we expect to win in districts where self-identified middle-class, homeownering voters form the majority of the electorate without talking specifically to them and about their needs?

Four Obama Inspired Lessons for California Democrats – Part One

The Obama campaign should serve as a master class in winning elections for Democrats.

82367455PR095_2008_Democrat

Unfortunately, not enough California Democrats are playing attention to the Obama campaign’s most important lessons.

As the effects of the state’s budget crisis and the nation’s economic meltdown hit more and more California voters, the Democratic Party has a once in a generation opportunity to convince voters that it that will protect and defend their interests far better than the Republicans, as well as make fundamental and progressive changes in the way that California is governed.

But to do so will require that Democrats embrace and implement the lessons of the Obama campaign.

These lessons are:

1. Blame Republicans and Present a Democratic Solution
2. Use the Internet
3. Expand the Electorate
4. Champion the Middle Class

Let’s look at them one at a time. [Note: For lessons 3 and 4, click here.]

1. Blame Republicans and Present a Democratic Solution

I recently heard a Republican leader of the state senate saying that the state’s $41 billion budget crisis was “not a Democratic problem or a Republican problem, but a California problem.”

While that kind of non-partisan sentiment and high-minded rhetoric might be praise-worthy in another context, here it is just plain Republican spin.  Of course California’s Republicans don’t want to take responsibility for the budget mess and the impending collapse of state government and public services, despite the fact that they have caused it by creating the most regressive and ineffective state revenue system in the nation and by obstructing any and all solutions that would require that the state’s corporate and business interests to share the burden of solving the crisis.

But the Democratic leadership appears to buying into the Republican’s public relations campaign and failing to place the blame for the crisis squarely on the Republicans.

In his reponse to Governor Schwarzenegger’s State of the State address, Senate President Pro Tem Darrell Steinberg (D- Sacramento) said that this is “no time for finger-pointing.”

If not now, when?

Throughout the presidential election campaign, Barack Obama consistently stayed on message and referred to the “Bush-McCain economic crisis.”

Why are California’s Democrats not referring to the “Schwarzenegger budget crisis” or the “Republican budget crisis”?

If the Democrats do not tell the voters that they should blame the Republicans for the state’s $41 billion shortfall and the impending collapse of state government and public services, who will?

Of course, blaming Republicans is not enough. California’s Democrats also need to present a clear Democratic solution to the state’s budget and economic problems.

During the presidential campaign, Obama talked about middle class tax cuts, investment in infrastructure, help for homeowners, and a stimulus package geared to getting America back to work.  His website contained detailed solutions to the country’s economic crisis.

What is the Democratic solution to California’s economic problems?

And where is it spelled out?

You won’t find it on the California Democratic Party website.

obama_google_5911

2. Use the Internet

During the presidential election, I received at least an email message per day from the Obama campaign.  And even now I receive several emails a week from the Obama administration.

But I’ve never received an email from the California Democratic Party.

(The Orange County Democratic Party does a much better job than the state party of using the Internet to communicate – thanks Melahat Rafiei!)

The California Democratic Party group on Facebook has 429 fans.  The website has not been updated since October 2008, before the November election.

The California Republican Party group on Facebook has 1,400 members.

The Internet is more than an easy, fast, and relatively inexpensive way to communicate.

It is also a potential game changer for California Democrats.

For years, the Republican Party has used direct mail to raise funds, project it’s message, motivate it’s base, and get out the vote.  It has developed extensive mailing lists and tremendous expertise in direct mail political marketing.

Democrats have been unable to compete with the Republican’s direct mail campaign – not least because direct mail is expensive.

But the Internet makes direct mail (nearly) obsolete.

It is also much less expensive.

The Obama campaign showed that Democrats can have a tremendous advantage over Republicans in Internet messaging and networking.

But to capitalize on that advantage in California, we have to use it.

Next: Obama Lessons 3 and 4: Expand the Electorate and Champion the Middle Class.

Why Obama Should Say No to Aid for California

The inaugural festivities are over and the new Obama administration is in place, but California’s Republican Governor Arnold Schwarzenegger and the state’s Democratic legislative leadership are sticking around Washington to lobby for federal aid for the financially starved and politically stalemated Golden State.

bill-clinton-pointing-finger

Last week, Schwarzenegger pitched for billions in federal financial aid in a letter to Barack Obama, in which he urged the new president to support a New Deal style “substantial federal stimulus program” for California.  According to Schwarzenegger, California is ready to undertake nearly $44 billion in infrastructure projects that are capable of creating nearly 800,000 jobs.

Specifically, Schwarzenegger told Obama that California is prepared to launch $11.8 billion in energy and energy efficiency projects; $11 billion in investment in road, transit and rail construction;  $4 billion in health care investment, including $1.4 billion in health care information technology; $8.5 billion in water and sewer projects; $1.1 billion in school construction, including broad band access and career technical education projects; and more than $5 billion in airport, park, public safety and other public works.

In addition, Schwarzenegger asked Obama for financial help to cover rising public health caseloads, tax credits for renewable energy projects, and federal funds to pay for the $1.6 billion estimated cost of retrofitting trucks in California so that they comply with state legislation to cut greenhouse gas emissions.

I doubt that Schwarzenegger reminded the president — who has economic worries of his own — that he had just vetoed the plan passed by the California legislature to raise revenue from the state itself to deal with California’s budget crisis.

Along with Schwarzenegger, California’s Democratic legislative leaders are also looking to President Obama and the federal government for financial aid.

In a letter sent to Senators Barbara Boxer and Dianne Feinstein and Speaker of the House Nancy Pelosi, California Senate President Pro Tem Darrell Steinberg (D-Sacramento) wrote “During this challenging time, the states — especially California — need the federal government’s help.”  Among the projects and programs that Steinberg wants federal help to fund are school construction and repair, job training, state park and wetland maintenance, new energy and green technology projects, highway and rail improvements, and affordable housing construction.

Steinberg and Assembly Speaker Karen Bass (D-Los Angeles) also held a conference call today with reporters to talk about how California can increase its share of the billions of dollars that President Obama wants to invest in public works projects as part of his economic stimulus package.

As a progressive Californian, I support these programs and projects, and I applaud the Democratic leadership for their advocacy of them in the face of rigid Republican opposition.

But I am not sure that the federal government should pay the tab – even for needed and necessary government services — that California refuses to pay for itself.

Senate President Pro Tem Steinberg has said that this is “no time for finger-pointing.”

I strongly disagree.

The confluence of the nation’s economic meltdown, California’s crushing financial crisis and $41 billion budget deficit, and the state’s political gridlock is precisely the time to point the finger – and squarely place the blame for the mess we’re in on Prop 13  and the state’s Republican Party.

Because of Prop 13 (which is now Article 13A of the California Constitution), California’s property tax is both regressive (that is, the same tax rate applies regardless of the value of the property or the income of the property owner) and severely limited (the property tax cannot exceed 1 percent of the property’s appraised value).

In addition, the property tax is unclassified — that is, the same tax rate applies to residential and commercial property, and to owner-occupied (homestead) and investor property.  This means that the state legislature cannot apportion the burden of taxation among classes of property based on their function in the economy or among property owners based on their ability to pay.

It also creates a political alliance, based on supposedly shared economic interests, among property owners of whatever size — uniting the perceived interests of middle class homeowners, such as someone who owns and lives in a $500,000 house in Fullerton or Modesto, with the state’s largest corporate, commercial and investment property owners.

Prop 13 also severely restricts – and in practice all but eliminates – the state’s ability to increase revenue and pay its own way.

Under Prop 13 (Art. 13A, section 3), the California legislature cannot increase the state’s revenue except by a two-third super-majority vote.  This means that a minority in the legislature – such as the current onstructionist Republicans – can prevent the state from obtaining the funds it needs to pay its bills.

In practice, it now means a $41 billion state budget deficit, as well as the disintegration of the state’s highways and infrastructure, and the elimination or drastic reduction of necessary government functions such as aid to schools, the poor, and the elderly.

Since it’s passage in 1978, Prop 13 has become the “third rail” (as in touch it and die) of California politics.

It has also become a rallying point for the state’s Republicans and their ideological opposition to government social programs of any kind.

It has allowed the Republican Party to pose as the protector and defender of middle class economic interests.

And it has pushed California to the brink – and now perhaps past the brink – of complete political dysfunction and economic collapse.

So while I applaud California’s Democratic leadership for looking for a way out of our political and economic crisis and in funding the state’s essential government projects and programs, it also seems to me that we must finally confront the $41 billion elephant in the room – Prop 13.

Until we do so, and until the governor and the legislature elected by the people of California can raise the revenue necessary for California to function, we should not expect the taxes raised by the federal government – paid for by the people of other states – to bail us out.

Perhaps, then, the best thing that President Obama and the Democratic Congress could do for California is to say no and insist that we first take care of Prop 13 and its crippling effect on our state’s ability to govern and pay for itself.

UPDATE

Yahoo has an article that calls California’s budget crisis a “golden opportunity” to eliminate Prop 13.

The article points out that “at the heart of California’s problems, economists say, is the government’s heavy reliance on personal income taxes, which produces wild swings in revenue as its coffers overflow in good years and dry up in leaner times.”

“A big reason for the state’s reliance on income taxes is Proposition 13, a voter-approved change to the state Constitution that limits property tax increases and requires any plan to boost taxes to receive the approval of at least two-thirds of the legislature.” ”

“The 1978 measure was credited with sparking anti-tax sentiment in other states and assisting Ronald Reagan’s election as U.S. president two years later.”

“Legislators have responded by burdening state residents with some of the highest income and sales taxes in the country.”

“Economists say the state has long needed to fix that revenue roller-coaster ride and are hopeful that this crisis will force leaders to face the music.”

Amen.