News: CJ Exclusives

N.C. Democrats Stay in the Shadows on New Stimulus Spending

White House agenda may be at odds with debt-averse constituents

Middle-of-the-road Democrats are dodging the $50-billion question: Will they or will they not grant the president’s latest wish for an “emergency” bailout of state and local governments.

President Obama sent a letter to House and Senate leaders June 12 asking them to approve $50 billion in new stimulus spending, warning that teachers, police officers, and firefighters would be laid off without it.

North Carolina U.S. Reps. Bob Etheridge, D-2nd District; Mike McIntyre, D-7th; Larry Kissell, D-8th; and Heath Shuler, D-11th, have not taken a position publicly on the request. None responded to phone calls and e-mails asking how they would vote on the funding.

Brad Crone, president of a Democratic political consulting firm in Raleigh, said the congressmen are playing it smart to lay low.

He said voters have “very little faith” in the ability of either federal or state government to turn the nation’s troubled economy around.

“Throwing more money at it doesn’t seem like the common sense solution” to most voters, he said.

Voters, Democratic and Republican, are “frustrated and angry,” Crone said, and if their representatives plan to vote for more spending, they’d be smart to keep it a secret until the day of the vote.

Andrew Taylor, chairman of the political science department at N.C. State University, agrees.

Taylor said the politicians are caught in the crossfire between the Democratic leadership in Washington, who believe that only government can stimulate the economy, and a growing number of constituents back home who believe the federal deficit is becoming unsustainable.

“It comes down to who you think is going to vote in November,” Taylor said.

If incumbents predict a large turnout, they should take the pulse of the average voters in their districts (which include a large number of Republicans and a growing number of Independents), he said. If they predict a small turnout, it would be wiser to appeal to their Democratic base, which is more likely to support the president’s agenda.

Former Libertarian gubernatorial candidate Michael Munger, who also chairs the political science and economics departments at Duke University, calls the bailout a “shell game.”

States have to maintain balanced budgets, according to their constitutions, while the federal government can run a deficit for as long as it likes. So when states spend too much they have no choice but to raise taxes or ask for federal funding, Munger explained. Since raising taxes is not popular, federal bailouts offer state politicians an escape from being held accountable.

But federal bailouts lead to federal deficits, Munger said, and deficits are nothing more than future federal taxes.

“There’s this fiction that there are two different taxpayers — the state taxpayer and the federal taxpayer. There are not. We’re all both,” Munger said.

People who think they are receiving some sort of gift from the federal government are being deceived, he added. All they are incurring is a different form of taxation.

If voters really thought it was worth spending an average of $1 billion more per state to rescue teachers, police, and firefighters, they would agree to an immediate increase in state taxes in a referendum. State elected officials know higher taxes are not popular, so they use a roundabout method to secure the funds.

“I think most of us do think firefighters and teachers are important,” Munger said. What he objects to is what he calls a “dishonest” way of financing them.

“If the state cannot find any responsible way to cut spending, they ought to bite the bullet and raise taxes,” he said.

“Whenever there is a budget shortfall,” Munger added, “the first thing the state government says is, ‘We’re going to have to cut teachers and police and firefighters,’ because that makes people think, ‘Oh no! These are crucial jobs. We can’t cut spending.’ The bureaucratic jobs are never on the chopping block.”

Sara Burrows is an associate editor of Carolina Journal.