Getting the Blues

In the winter and early spring of 2001, when Dick Cheney was telling Californians that their sky-high electricity bills were their own tree-hugging fault, you might have thought the Administration was just covering for Enron CEO Ken Lay and George W. Bush's other Texas energy friends and, as an added bonus, sticking it to the lotus-eaters on the Left Coast who'd given Al Gore his million-vote California majority.

But that was just the paranoia of the innocent. In the past year, as the nation's deficit-ridden states were pleading for federal help, Washington was telling them all to drop dead--reserving harshest treatment for the "blues," meaning the liberal states that voted for Democrats. While California was not alone, it was certainly the biggest target, as the only large state with a Democratic governor, Democratic legislature and a Congressional delegation dominated (32-to-20) by Democrats. "They view California," said a Washington lobbyist, "as a foreign land."

Some of that you can ascribe to the Administration's efforts to suck every possible dollar of the cost of Bush's tax cuts from the states. But behind the fiscal policies--the unfunded mandates (i.e., new federal requirements without funds to help states comply); the cost of NCLB, Bush's "No Child Left Behind" education law; the childcare expenses made necessary by the Administration's proposed new federal work rules for welfare recipients--there seemed to be an ideological thrust, bordering on vindictiveness, aimed at teaching the liberal states a lesson.

Late in April, as states like Oregon were preparing to close schools weeks before the end of the term, and others were dumping hundreds of thousands off the Medicaid rolls, laying off cops and raising college tuition to close a collective two-year deficit estimated by the nonpartisan National Conference of State Legislatures (NCSL) at upwards of $100 billion, Grover Norquist said he'd like to see a state or two go bankrupt.

Norquist, who runs the conservative Americans for Tax Reform and heads what Bill Moyers has called a politburo of conservative strategy, is also joined at the hip with Karl Rove, the President's political brain and one of his chief policy advisers. "I hope a state has real trouble getting its act together," Norquist told the New York Times's David Firestone. "We need a state to be a bad example, so that the others will start to make the serious decisions they need to get out of this mess." When Norquist speaks on such issues, you're never sure whether he's the ventriloquist or Rove's talking dog.

Brian Riedl, a fellow at the Heritage Foundation, put it more mildly, but it amounted to the same thing. "Deficits," he said, "provide states with a golden opportunity to examine their budgets and reduce wasteful and ineffective spending, which helps them keep taxes low and aid the economic recovery." Lay off those teachers, kick poor working mothers off the rolls of those who get help with childcare, close a few more parks. Norquist's and Riedl's remarks were generally directed at "states," but it didn't take much parsing to conclude that they weren't referring to Nebraska or Alabama. It was the liberal states--the Democratic states with the relatively generous social welfare programs and the more progressive tax rates--that they were talking about.

Forget that Washington, with Bush's multitrillion-dollar tax cuts, is running deficits that are proportionally larger than those of the states; forget that at least part of the states' problems resulted not just from their unchecked boom-era spending and from a recession compounded by misbegotten federal economic policies but from their own tax cuts, which could have come straight out of Norquist's playbook. Both New York and California would have $13-$14 billion more in annual revenues had they not cut their own taxes during the mid- and late 1990s. Which is to say that the states' problems are also compounded by Norquist's White House friends and his allies in the Republican Congress.

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