All over the country, states are facing something unexpected: budget surpluses rather than deficits.
At the beginning of the pandemic, budget and tax experts all over the country predicted that state and local governments alike would run into record shortfalls in the coming year. At the time, with much of the economy shut down, these dire predictions were certainly understandable. While some states did end up facing major deficits last year, they’re now dealing with a quicker-than-expected recovery that’s provided a major boost to tax revenue.
In other states, like Maine, the expected deficits never materialized, and the state now has both higher-than-expected revenues and a plethora of federal aid being distributed. Indeed, state and local revenues all over the country are now running higher than they were before the pandemic – which means that many states not only don’t need any more federal aid but also don’t even need all of the state taxes they’re taking in.
This lack of budget catastrophes at the state level has proven Washington Republicans right on a number of counts. While their initial offer on the stimulus plan may not have impressed Democrats, it’s becoming increasingly clear that the stimulus package pushed through on a party-line vote was entirely too generous.
At the time, Republicans especially objected to the levels of aid being offered to state and local governments, and they were right to be concerned about it. Even if Republicans hadn’t gotten their way in completely eliminating aid to local governments, Democrats should have been more willing to negotiate on paring back that spending, since so much of it has been proven unnecessary. Much of that money in the stimulus package has already been distributed to states, but Congress should reconsider whether to spend the funds that remain.
That’s where the next point where Washington Republicans have been proven correct comes in: on President Biden’s infrastructure plan. Part of Biden’s way to pay for his massive infrastructure proposal was to raise taxes, a plan which Republicans rightly opposed. With the Memorial Day deadline for a bipartisan compromise on infrastructure looming, Sen. Mitt Romney, R-Utah, proposed recently that a portion of the unspent stimulus plans be reallocated to infrastructure spending.
That’s a reasonable proposal that makes perfect sense: It could at least partially negate the argument for a tax increase in the bill, opening the door to more widespread Republican support. That doesn’t mean that the whole Senate Republican caucus will suddenly come banging on the door of the White House eager to get things done, but perhaps a few of Romney’s more rational colleagues, like Susan Collins and Lisa Murkowski, might be persuaded to come on board.
This approach holds the potential of both peril and promise for both sides. For Democrats, it would mean that they’ve essentially agreed to renegotiate part of the stimulus package, and they’d be conceding that their Republican colleagues had a point with some of their earlier objections.
That might not seem like a big deal, but nobody in Washington ever likes to admit they’re wrong. Democrats would be essentially admitting that they were wrong on several fronts simultaneously, both in tactics and in policy. Tactically, they’d be conceding that they were wrong to abandon bipartisan negotiations and go it alone on the stimulus package. Romney’s offer implies that he and some of his colleagues may have been willing to support a slightly smaller stimulus package, rather than sticking to their initial $618 billion counter-proposal.
While the Republican stimulus proposal contained no funds for state and local governments, Romney’s approach last week acknowledges that some aid was indeed necessary. On the policy side, Democrats would be admitting that Biden’s stimulus package was, indeed, too large – or at least that it wasn’t entirely properly allocated.
There are risks for Republicans as well. It’s always easier politically to be united in lockstep opposition to the majority: That’s why Mitch McConnell said a few weeks ago that Republicans were completely dedicated to stopping Biden’s agenda. It rallies the base and has appeal to donors and activists alike.
It’s not a good way to grow the party, though, nor does it give average voters much of an idea of what you’d do in the majority. That’s why it ultimately pays off politically to show your willingness to engage in governing, rather than just always being the party of “no.”
Hopefully this time, those Senate Republicans willing to try will find a White House willing to listen.
Jim Fossel, a conservative activist from Gardiner, worked for Sen. Susan Collins. He can be contacted at:
jwfossel@gmail.com
Twitter: jimfossel
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