Politics is not like business.  Making a deal in business makes sense if everybody makes money on it.  Most of the negotiation in business is an attempt to maximize the benefit of a business deal to those trying to negotiate the deal, but in the end, if everyone makes money, the object is to make the deal.  A business deal is a win/win deal (or at least perceived to be) or there is no deal

That is not so in government and politics.  Political deals are by definition win/lose, or they would be business deals.  You don’t have to force someone to do something that will make them money.  Force is necessary only when one party or the other perceives that a deal is a loser.  Politics involves winners and losers by definition.

That is why this coming year’s budget fight is a critical fight.  The winners and losers are easy to define.  If taxes are increased the winner is the government, i.e., the government unions and the permanent bureaucracy (the leaders of which actually drafted the budget).  The losers are the taxpayers.  It is just that simple.

Democrats get it.  They want the government unions and the permanent bureaucracy to win.  That is how they gain and keep power.  They know how to hold out on a budget deal until the government wins.  They have done it every year.

The Governor doesn’t get it.  He is used to business deals.  He thinks he can get a win/win.  He has approached each budget negotiation as a business deal, and, in his eagerness to get a deal each year, he has allowed the permanent bureaucracy and the government unions to be the big winners.  In every budget year (after the first one), the Governor’s deals on the budget have been to "get through" the next budget year.  Each deal was based on expedience.  The $14 billion spending increase in 2005-6 was to get through the special election that year.  The $10 billion spending increase in 2006-7 was to get through the Governor’s re-election bid.  The 2007-8 budget was just to get a deal, even though the seeds of the current debacle were appearing.  2008-9 was just to get a deal to get something on the books before the end of the year.  In each budget agreement, the government won, and the taxpayer lost.

Republican legislators have understood the problem, but gave into expedience in 2005, 06, and 07.  In 2008, they finally said no more expedience.  The test for this year’s budget fight, which will start immediately on January 5, is whether they will once again give in to expedience, or, once again, fight for the taxpayers. 

Those are the choices.  The government unions and the permanent bureaucracy has won every single budget fight in the last 30 years.  Those "victories" have led the state to the brink of bankruptcy, with Republican governors and legislators participating, mainly out of expedience.  State taxpayers are paying the price for that expedience, and the taxpayers’ only protection left is the commitment of Republican Legislators.

The Governor long ago capitulated to political expedience.  I know he doesn’t understand it, but he is actively pushing for government unions and the permanent bureaucracy to win once again.  If they do, Democrats will be stronger politically, taxpayers will be worse off, and the state will face the same budget problems it faced in 1992-95, 2001-2004, and 2008-?? sometimes in the next five years.

Republicans will not receive credit for doing the right thing, no one will compliment them for protecting the taxpayers, they will be excoriated by the Governor, by the press, and by the Democrats for holding out to protect taxpayers.  The only benefit they will get for pressing for spending reductions without tax increases will be the satisfaction of a job well done on behalf of the people that elected them.  Will that be enough?  It should be.

This entry was posted on Tuesday, January 6th, 2009 at 12:00 am and is filed under Blog Posts.