This morning, the House Oversight and Government Reform subcommittee began its first in a series of hearings on state and municipal debt. As is their wont, Republicans insist that this is another problem easily solved by spending cuts. Here, from The Wall Street Journal's liveblog, is how Rep. Patrick McHenry (R-NC) described the situation:
The GOP hewing to the talking points. Rep. McHenry ends his statement by calling for an end to "reckless spending" in the states and in Washington, and "unsustainable bailouts."
Reckless spending in the states? I'm not so sure that's true. From the Center on Budget and Policy Priorities:
In the 27 states for which the CBPP has data, annual spending is below 2008 levels for 22 of them. Three states are spending slightly above 2008 levels, and only two states -- Alaska and North Dakota -- are spending more than 2 percent above 2008 levels. Texas, a state not known for its fiscal generosity, has a deficit that comes to 30 percent of its budget.
To call these crises a failure of fiscal discipline is to miss the point entirely. More than anything, the recession is the main culprit in rising state debt. Besides, there isn't much more to slash: States have already made deep cuts in education, health care, social services, and pay for public employees. At a certain point -- probably now -- cuts become counterproductive to the goal of a strong and well-functioning state.
