End of the Welfare State?

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Over the decades many of us have wanted government to take care of us – when we are feeble, when we retire or are poor and unable to work, when our property floods, when a tornado hits, when a neighbor does something that is irritating, when aged aunt Bessie has to be institutionalized, or when we need some place to park the kiddies so we can work all day. Elected officials have been eager to accommodate by designing taxpayer funded programs and services ranging from Food Stamps to disaster assistance and code enforcement, programs to protect the vulnerable and serve the disadvantaged and, to provide child care for the working poor, and – of course – public schools for the kids.

Somehow government has found a way to pay for all that help. Government coffers have been funded by everything from the federal deficits to voter supported tax increases and the government revenue surge produced by the housing and finance driven economic bubble until it burst in 2008, starting us all on an economic downhill slide.

Most of us have seen our retirement savings and our plans for the future eroded by the 2008 bubble recession. Many have lost jobs, others of us wonder how long our current job will last. The value of our homes, if not foreclosed upon already, has declined and we are still wondering where the bottom is. We have all been hurt by this bubble recession and worry about what is just around the next economic corner. Most of us are struggling to cut our costs and are not interested in paying more for anything – including taxes.

In this environment of declining wealth and uncertainty we read daily about government at all levels lacking the income to support current levels of service and programs. We are beginning to realize that going forward the things that government has been doing for us (some would argue it is “to us”) do not seem financially sustainable. There is growing support for cutting back government to fit the funding that is available to it and to do it now – as the saying goes, to “bite the bullet”.

With growing alarm at the size of the ballooning federal deficit, it appears Congress is poised to begin doing just that. Most states, which do not have the luxury of being able to deficit spend, are faced with large deficits and a legal mandate to balance their budgets. From New York State to Florida, Wisconsin, Nevada and California, governors have submitted budgets calling for dramatic cut-backs in order to match state expenses with income.

In California Governor Brown has proposed plugging a $25 billion dollar budget gap with a combination of program and service cuts and an extension of tax increases approved by the legislature and then Governor Schwarzenegger a couple of years go. Generally speaking, half the $25 billion would be covered by cuts, and half by the tax extension.

The Republican minority in the California legislature is in the cat-bird seat. At least a few of them would have to join Democrat legislators to vote to put the tax extension issue before the voters, and for now Republican party leadership is saying no way. Once the deadline passes to schedule an election before the July 1 start of a new budget year, it will be too late to do anything but craft a budget that covers the entire $25 billion shortfall with cuts. That deadline appears to be some time in March. If the legislative votes are not there to put the tax extension on the ballot by then, the legislature and governor will have no choice but to pursue a balanced budget achieved almost totally by cost and service reductions. Of course if the voters did get the chance to vote on these tax extensions, the governor and legislature would be faced with the same budget cutting challenge if the voters rejected the extension proposal.

At that point many of the state programs and services that various of us utilize either directly or indirectly will be reduced or eliminated by the biggest state budget cutting exercise in memory. California will of necessity take a giant step toward the elimination of the welfare state. Some seem to think such reductions would be painless – perhaps invisible – to the average California citizen but $25 billion is such a big figure it is hard to fathom how that could be.

Many of us will have to learn to become a little more self-sufficient and to reduce our expectations that government will take care of the number of our needs that we are used to. This promises to be an exciting trip. Fasten your seat belt.


About Over But Not Out

A retired Orange County employee, and moderate Republican. The editor seriously does not know OBNO's identity as did not the former editor, but his point of view is obviously interesting and valued.