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Editorial

Fixes are clear for U.S. and state budget messes

Painful service cuts and tax hikes are required, analysts say. But responsible budgeting is the last thing on lawmakers' minds.

November 12, 2010

Sacramento and Washington both got news Wednesday that nobody wanted to hear, when the state's nonpartisan Legislative Analyst's Office and President Obama's bipartisan deficit reduction commission unveiled reports that came to markedly similar conclusions: Getting the state and federal governments' budgets under control will require an extremely painful combination of tax increases and spending cuts.

Officeholders were reluctant to label the federal blueprint dead on arrival, but of course it is. The co-chairmen of Obama's commission, President Clinton's former chief of staff Erskine Bowles and former Republican Sen. Alan Simpson, presented a plan that would eliminate $4 trillion in projected deficits by 2020, yet would do so by targeting politically untouchable programs and tax rules. Politicians of both parties have remained mostly silent about the plan because there's much in it for liberals and conservatives alike to hate; it would eliminate mortgage deductions, raise the gasoline tax, slash overseas military bases, raise the retirement age for Social Security and end congressional earmarks, among other third-rail proposals.

Fortunately for Congress, if not so fortunate for the U.S. economy, the federal government can print money and borrow from China, so it doesn't have to balance its budget. Unfortunately for California's Legislature, the state doesn't have that luxury. According to the Legislative Analyst, the state faces a $25.4-billion deficit, billions more than expected. In part, that's because the economy has been slow to recover; in part, it's because the budget passed last month was based on faulty assumptions; and in part, it's because California voters last week approved two measures that will make it harder for Sacramento to collect revenue from businesses and local governments. The report was clear about the solution: It will require both tax increases and spending cuts, over the course of several years, to eliminate the structural deficit.

But that kind of responsible budgeting is the last thing lawmakers intend to do. Republicans are adamantly opposed to any tax increase, and Democrats have vowed to protect cherished spending programs. Voters enjoy blaming politicians for the resulting gridlock, but they too are at fault. Republican lawmakers know they could lose their jobs if they approve a tax hike, and Democrats know the same could happen to them if they lay off teachers or end child health programs.

For government to put its financial house in order, politicians must accept that they are public servants, and that sometimes properly serving the public means risking the wrath of constituents. Several Democratic members of Congress, who did the right thing for the public by passing a historic healthcare reform bill, learned that painful truth last week. We hope more politicians of both parties go that route. But we're not holding our breath.

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