LUNCH WITH SAINT BETTY- BATTLE OF THE BUDGET
July 22nd, 2010
Scott, since you liked the first one, I thought you might like this one too!
Note: This was written over a year ago, and although the content is Connecticut specific, the trend I addressed was and is a nation-wide trend.
“I’m buying a house!” We were at our usual Saturday lunch at Antonio’s and I watched Saint Betty’s face, as comprehension slowly settled in and she went from blank to aglow with pride. I love making my Mom happy, although I must admit I am not at all sure that I can pull this off. Anyone who has known me for any length of time can tell you that I have always dreamed of owning my own home. I’ve never even been close to achieving that goal, but I watched with pride as each of my three children bought their first homes, and that alone was enough to fulfill my own dream.
But every day I hear and read that it’s now a “Buyer’s Market.” Prices and interest rates are at an all time low, and I fear that if I don’t give it my best shot now, I’ll probably never have another chance. Yet I also hear that things may get worse before they get better; and I heard that even President Obama recently alluded to a possible Depression. That makes me very nervous.
Against my objections, Saint Betty insisted on paying for our lunch”to help me save money for my house.” I tried to fight what I knew was a losing battle, it’s not like her financial position is any better than mine, but as usual Mommy prevailed, and when the battle was over, our favorite waitress, Jody, was rewarded by my Mom with what I am sure was a generous tip.
Right now in Connecticut, there is a much bigger battle going on between our Republican Governer, M Jodi Rell, and our Democratic legislature over how to resolve what seems to me to be an outrageous government debt (known in political parlance as “the deficit”).
It seems to me that money is at the heart of so many arguments. I can relate to that; I think most people can relate to that. I don’t know a single person who has enough money; everyone is in debt, and they say that most people are just one or two paychecks away from being homeless. That is really scary.
From what I understand, Governor Rell is standing firm on balancing the budget by cutting spending rather than by raising taxes. I appreciate that; it seems to me that I already lose an awfully big chunk of my paycheck to taxes. I really can’t afford to lose any more of it, so how the new budget for Connecticut is resolved is of great concern to me.
As a single mom for most of my children’s lives, money was always an issue. By the time they became (and, thank God, remain) financially independent, my credit was destroyed. It seemed that as soon as I would come close to paying off my bills, I would find myself unemployed and my financial situation would go right down the tubes again. Right now, I am in pretty good shape, but that could change in a heartbeat
During those times when the money I earned did not equal the money I spent, I had two choices: I could find ways to spend less or I could get a second (and at times a third) job. More time working never did appeal to me, so my choice was always to first find ways to spend less. This was never easy as I was a pretty frugal person to begin with, and the new budget usually involved eliminating the things that my children wanted but, in my opinion, did not necessarily need. And the older they got, the more it seemed they “needed.” I understood that, and I think it upset me as much as it upset them when I had to say no.
Connecticut has a huge deficit right now and I don’t see that our legislature has any more options to fix that problem than I ever did. Their only choices are to either cut spending or to get a second job. The trouble is that the one and only source of income our government has is tax revenue. So the way I think it would work is that if Connecticut chooses the increased income path (ie, raising taxes) rather than the spending cut path, my taxes (and everyone else’s) will go up, so I’m the one who will have to get a second job to compensate for the bigger chunk of my paycheck that I lose! And that second paycheck will also have a bigger chunk taken out: working more for less? No way!
In her “State of the State” address in January of 2009 (I think), Jodi Rell exactly expressed my feelings to the General Assembly: “As families struggle to pay their monthly bills, so will we. As they cut back on expenses and forego new purchases, so must we. And we must do it at a time when, as is the paradox of government, more and more families will be looking to us for help… I know how easy it is for us to be overwhelmed by the incessant drumbeat of bad economic news. It hangs about us like a tight-fitting cloak… This will be a time of shared sacrifice. That which we would like to do will be set aside for that which we must do…But we do need to make cuts and we do need to prepare our state to make the most of the economic recovery when it comes – and it will come.” About a month later, Ms Rell presented her two year budget proposal to the legislature.
This strategy of cutting spending rather than raising taxes was not a new one for our Governor. According to a press release from Rell’s office in June of 2008: “Governor M. Jodi Rell today announced she is ordering Fiscal 2009 budget cuts of 3 percent to 5 percent at state agencies and commissions to offset an anticipated shortfall of about $150 million in the fiscal year that begins July 1.” She ordered a state hiring freeze, a state purchasing freeze, sought reductions in state gasoline usage, banned out of state travel and took other actions. We averted the red ink and instead ended the year with a modest surplus.
So it worked once; why not try it again this year? It just makes sense to me!
So, as goes the process, Jodi (I will probably get in trouble; I don’t think you’re supposed to call a Governor by her first name, but that’s how I think of her) submitted her no new tax budget and the Democrats submitted their budget revisions in response.
Boy oh boy! Was Jodi ever mad! She released a statement on April 2, 2009 that said: “The Democrat’s budget almost defies description. There are phantom budget cuts and astonishing tax increases. They do nothing to address the bloat of state government…And they are borrowing – yes, borrowing, to close this year’s budget deficit. It’s as if they have just given up…Just ring it up on the state’s credit card. No cuts needed, no questions asked. Seven years of interest payments by the families of Connecticut…It’s the most fiscally irresponsible scheme I have seen in years at the Capitol. This budget totally ignores what is going on in our state, in our nation, across the globe. It’s as if they don’t know we are in the deepest recession in generations. People are losing their jobs, their homes, their hope…They don’t get it. They want what they want. And they’ll raise taxes, by the billions, to get it. I don’t understand how they can raise taxes by $3 billion in an economy like this – with so many families hurting… There are 3 months left in this fiscal year. Work with me. Cut with me. Show leadership. Don’t abdicate your responsibility. Too much borrowing and too much spending by Washington, Detroit, and Wall Street have caused the problems we are facing. Too much borrowing and too much spending in Hartford will only make matters worse.”
Whew! I’m glad I wasn’t on the switch end of that! All I could think was; $3 billion in new taxes and on top of that they want to borrow money! In all the periods of my life when I did not have enough money to pay my bills, it never once occurred to me to borrow money! If I couldn’t pay the bills I already had, how on earth could I pay yet another one? I am not a politician and I am not an economist, but to me it just doesn’t make sense!
Well, Jodi apparently did not give up, she got over her anger and she submitted a second budget proposal. I was praying, I gotta tell you, because I simply cannot afford to pay any more taxes. $3 billion! Yikes.
And then one day recently I was on my way to visit my favorite client, Lee, and I was listening to the Jim Vicevich show on the radio (as usual). I heard that the General Assembly had ended their session. What really took me back was to hear that not only had they not resolved the budget issue, they had barely even talked about it!
I heard a lot about what they did talk about and they approved a lot of good programs. But I thought the budget was at the top of their agenda, and until they figure something out, my house dream remains just that…an unlikely “castle in the air.” When I got home from work that evening, I submitted my application for a weekend job at Home Depot, just in case.
The legislature is now in “Special Session,” and I don’t know what will happen. I don’t know and I am very nervous.
I may lose the house I never had, and my lunches with Saint Betty may soon come to an end. After all, if I have to help pay the $3 billion they are talking about, I won’t be able to afford my one meal out a week and Antonio’s may not be able to afford the additional taxes they will surely be asked to pay. I hope our lawmakers will consider people like me, Saint Betty, and the Antonios – we’re all certainly willing to pay our fair share, but there’s a limit to our resources. I like the way Governor Rell put it: “Too much borrowing and too much spending by Washington, Detroit, and Wall Street have caused the problems we are facing. Too much borrowing and too much spending in Hartford will only make matters worse.”
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