Saturday, February 28, 2015

The Republican Model of Governance

Four republican governors, three of whom are running for president in 2016, have shown a model for governance. The substance and style of their state leadership possibly could be adopted nationwide. By looking at the numbers, one can determine whether that would be a good thing or a bad thing -- ultimately, the voter will have to decide for himself or herself.

Wisconsin has an all-star governor, at least right now in the conservative polls. Governor Scott Walker has survived a recall election, won campaign after campaign, and stood foot to foot with aggressive labor unions. He is agnostic on the faith and patriotism of the president. Mr. Walker, on a recent trip abroad, "punted" on a question related to evolution.

On economic issues, he has some problems. Wisconsin went from a $517 million surplus in June of 2014 to a projected $2.2 billion deficit. Like you will see throughout this post, Mr. Walker implemented supply-side (a.k.a. "trickle down") tax cuts. Considered orthodoxy in conservative politics, it is believed that tax cuts can result in higher revenues because of increased economic activity. Right-leaning economists have debunked this crank theory.

In conjunction with less revenues, Wisconsin has not expanded Medicaid via ObamaCare. The costs for Medicaid are squeezing the state budget, yet Mr. Walker remains obstinate on his position. It is estimated that if Medicaid were expanded, the state could save $200 million a year. With choices having to be made, Mr. Walker has decided to cut education. The university system in Wisconsin will have to deal with a 13% cut to its operations. Naturally, students and teachers are not happy.

Hundreds of miles east, Governor Chris Christie -- known for his pugnacity and straight talk, and bridge politics-- manages the state of New Jersey. Mr. Christie faces problems of his own. Recently the New Jersey Supreme Court ruled that his unilateral cuts to the state pension fund were unconstitutional. Like Mr. Walker, Mr. Christie has to answer for a structural deficit of $7.3 billion. Since Mr. Christie refuses to raise taxes, he has proposed withholding property tax rebates, and refusing to fund state pensions. Toxicity surrounds Mr. Christie so now wealthy Republican donors are backing Jeb Bush rather than the New Jersey everyman.

Louisiana's governor is not quiet about his conservative credentials. Even after no-go Muslim zones were mocked and fact-checked, Governor Bobby Jindal stuck with it. Mr. Jindal embraces creationism, mocks climate change scientists, and courts birther voters. He isn't shy when explaining why the state's coffers are so depleted. It is all planned -- he wants to reduce the size of government.

Next year, Louisiana anticipates a $1.6 billion shortfall. Mr. Jindal has already spent money allocated for senior citizens, infrastructure, and reserve saving. His frantic strategies to pay for his own tax cuts have resulted in buildings sold and tax amnesties declared. Over $1 billion was added up from "gimmicks, games, and accounting tricks." Next year, Mr. Jindal may not be so fortunate -- the one-time sources may be dried up.

Like Messrs. Walker, Christie, and Jindal, Kansas Governor Sam Brownback ran passionately on his promise to cut taxes. He stated proudly that his conservative model would be a model eventually replicated across the country. Unfortunately for him, and for Kansas residents, the state is in trouble. Mr. Brownback has to find a way to fill a $280 million shortfall.

Similar to Mr. Christie, the Kansas Supreme Court declared Mr. Brownback's education cuts illegal. The schools are underfunded and the governor has to address it appropriately. One of the biggest tax cuts in history has led to fiscal ruin for the Midwest state.

One can see how a Republican would govern the nation. On the campaign trail, promises would be made about tax cuts, increased economic opportunity, and fiscal responsibility. When eventually it came to governance, however, reality would kick in. A president cannot fudge the numbers; they would have to find a way to pay for their proposed tax cuts.

The data is out there. We all know the Republican model for governance. Let's hope that it is not adopted at the federal level. It's not as pretty as promised.