Bush to Governors: Get Lost – But Give Me Help on Tax Cuts

Posted February 26, 2003 at 1:50pm

In 1975, President Gerald Ford turned down a bail-out request from financially strapped New York City, leading to a tabloid headline “Ford to NYC: Drop Dead!” That’s about what President Bush told the nation’s governors this week. [IMGCAP(1)]

Facing collective deficits of $30 billion this year and $80 billion next year, members of the National Governors Association went to see their old colleague, ex-Texas Gov. Bush, hoping for help.

They got none. Bush said he has a federal deficit to contend with, told the governors they’re already scheduled to get a 9 percent increase in federal payments — and spent most of his time trying to sell them on his $674 billion tax-cut plan.

Some states, like New York in the 1970s, only have themselves to blame for their worst financial crisis in 50 years, having increased spending faster than revenues during the booming 1990s.

But that’s not true for states in general, according to the NGA. And, in refusing new federal aid beyond what’s obligated by law, Bush is failing to help with mandates forced on the states by federal policy — some initiated by Bush himself.

For the current fiscal year, for instance, Congress authorized $16 billion to carry out Bush’s “No Child Left Behind” education reform policy. Bush requested funding of just $11.4 billion. Congress ultimately approved $11.7 billion, leaving the states more than $4 billion short.

For fiscal 2004, Congress authorized $18.5 billion, but Bush requested just $12.3 billion, leaving deficit-plagued states scrambling to find the money to fulfill demands for standards-raising and testing that Washington has imposed on them.

The education shortfalls come just at a time when a new study by conservative education experts concludes that “there is little sign of gains in student learning” since publication of the landmark 1983 study “A Nation at Risk.”

Published by the Hoover Institution, the study finds that “test scores are at basically the same level today as in 1970. Students do no more homework than they did 20 years ago. … Graduation rates have actually declined. … And international assessment results reveal that American 17-year-olds know far less math and science than their peers in other modern nations.”

The authors emphatically believe that more education spending is not the answer — they favor more parental choice and tough accountability — but buried in the study is the dramatic fact that the average U.S. teacher makes only $36,500 a year, $14,000 less than the average college graduate.

If states and local districts have to meet world-class standards, it’s going to be hard to do so without paying teachers a competitive professional salary — something they can’t do while facing deep budget deficits and unfunded mandates from Washington.

One other mandate is the requirement to offer disabled students a quality education. Congress has promised to pay 40 percent of the costs, but actually has come up with only 17 percent of the money, leaving the states to pay costs of more than $11 billion per year. [IMGCAP(2)]

And the war on terrorism presents huge new requirements for the states. Public health systems need to be upgraded to recognize chemical and biological agents. Fire and police departments need communications equipment, training and protective suits. Hospitals need “surge capacity” to cope with large-scale disasters.

Homeland security funding for the states nearly doubled from fiscal 2001 to 2002, going from $5.6 billion to $11.7 billion. But then Bush requested only $8.4 billion for fiscal 2003 and Congress gave the president just $6.5 billion in the omnibus funding bill he signed last week.

Bush tried to blame Congress for the under-funding, but NGA officials say they’ve been told by Republicans in Congress that final numbers in the bill were written by Vice President Cheney and Office of Management and Budget Director Mitch Daniels at the GOP Congressional retreat at the Greenbrier resort in early February.

Governors convening in Washington complained about not only homeland funding levels — Bush’s new budget calls for $7.9 billion, still $1.8 billion below the 2002 level — but also rigid federal requirements on how the money is to be spent.

In one area, the administration did offer the governors some potential relief in the form of an offer of new flexibility in running Medicaid programs for the poor and extra money if they take it.

However, the governors reacted with suspicion to the proposal when it was presented by Health and Human Services Secretary Tommy Thompson, who acknowledged that funding would rise for seven years under his plan, then fall for three to be revenue-neutral over 10 years.

“The most important thing to happen at this conference,” said the NGA’s chairman, Kentucky Gov. Paul Patton (D), was the administration’s agreement to form a task force with the governors to agree upon a Medicaid reform plan.

Senate Majority Leader Bill Frist (R-Tenn.) said Congress might help governors by giving some federal prescription drug assistance to so-called “dual eligibles” — low-income seniors who qualify for both Medicaid and Medicare.

The governors want the federal government to pick up the whole cost of helping 6.3 million “dual eligibles.” That’s not likely to happen under the Bush administration.

It’s true that the federal government is running a deficit and has a war to fight. On the other hand, it is failing to meet obligations it has foisted upon the states. Before cutting taxes, Bush ought to fulfill Washington’s moral obligations.