LOS ANGELES — After years of grueling battles over state budget deficits and spending cuts, California has a new challenge on its hand: too much money. An unexpected surplus is fueling an argument over how the state should respond to its turn of good fortune.
The amount is a matter of debate, but by any measure significant: between $1.2 billion, projected by Gov. Jerry Brown, and $4.4 billion, the estimate of the Legislature’s independent financial analyst. The surplus comes barely three years after the state was facing a deficit of close to $60 billion.
Governor Moonbeam did what Ah-nuld was unable to do in two terms. Brown is a Democrat, but a fiscally responsible one. Which just goes to show: if you want to actually balance budgets, not harp and moan about them, elect Democrats.
Ruh-roh. Republicans have made budget deficit alarmism the main reason for their existence, but facts and math have thrown a wrench in their political plans:
Republicans who have made the deficit their central ideological focus are, in some sense, the dog that caught the bus. The nonpartisan Congressional Budget Office estimated this month that the deficit for this fiscal year, which ends Sept. 30, will fall to about $642 billion, or 4 percent of the nation’s annual economic output, less than half the 2011 deficit and about $200 billion lower than the agency had estimated three months ago.
The agency forecast that the deficit, which topped 10 percent of the gross domestic product in 2009, could shrink to as little as 2.1 percent of the G.D.P. by 2015, a level most analysts say would be easily sustainable over the long run.
In fact, Republicans’ insistence on chasing the “exploding budget deficit” fairy tale has been problematic for their political strategizing:
House Republicans had envisioned a plan to reach a comprehensive deficit reduction deal predicated on a showdown in July over the debt ceiling. That showdown was supposed to drive both sides back to the bargaining table, but a rapidly falling deficit, rising tax payments and huge infusions of cash from the newly profitable, federally controlled home financing agencies Fannie Mae and Freddie Mac have scrambled those plans. Now, the debt ceiling may not have to be raised until October or November, in the next fiscal year.
Awwww…. Meanwhile, the Tea Party is digging its heels in, continuing to call for cuts and refusing to negotiate with the Senate on reconciling the two chambers’ differing budget proposals. This is all because the Republicans are in utter disarray. I’m not sure an image of a Republican Party unable to find its own ass with a map and a compass is how the GOP envisioned going into the 2014 midterms.