Thursday, February 18, 2010

Cahill's Catch-22

The Globe this morning runs a front page article titled "Patrick challengers offer ideas to close budget gap." The sub-title reads: "But Cahill demurs on detailing a plan." That sounds familiar for some reason...

Three paragraphs in comes this jaw-dropper:
And state Treasurer Timothy P. Cahill, although he promises to cut spending on health care, education, and local aid, says he cannot offer more details about his plans until he is elected governor. “I don’t have enough insight into the budget, especially particular areas where money is being wasted, until I get in there,’’ he said.
Just to clarify for those who might be joining late, Tim Cahill is the Massachusetts State Treasurer. He's been the Treasurer for the past eight years. The first paragraph of his official bio says he "manages the state finances...". A year-old, pre-gubernatorial-campaign version of that bio went further, calling him "the Commonwealth's Chief Financial Officer."

One might reasonably ask how he's possibly fulfilled that important CFO role for most of the past decade, while lacking "enough insight into the budget" to identify potential spending reductions.

But in truth, Treasurer Cahill's demurral to the Globe's invitation to "come up with five ways [he]would close the more than $2 billion budget gap the state is facing next year" is not an answer so much as implied recognition of the Catch-22 that he has walked into at this early stage of the campaign.

Earlier this month at a state AFL-CIO conference, Cahill reassured his long-time union allies that if elected he will keep his hands off of the current public pension system. That public pension system is, by any honest account, a huge part of the cause of the state's current fiscal problems - both at the state and local levels. A couple of weeks later, Cahill performed a tax-cut about-face and announced a proposal to cut state taxes across the board.

These two bold statements: "leave the pension system alone" and "tax cuts across the board" are intended to woo two very different groups of potential supporters. The first is obviously meant to retain and shore up the support of organized labor, a crucial part of the political machine that he spent years building as a Beacon Hill Democrat, before his politically-induced conversion to "independence" late last year. The second, just as obviously, represents an attempt to poach the state's resurgent fiscally conservative faction (Republicans, Unenrolleds and Democrats alike) from Charlie Baker, the obvious and natural choice for such voters.

The problem for Cahill is that there is no way to connect up his two bold statements. There is no way to square that circle. You can't get there from here, as they say. Some significant reform of the state's public pension system, such as proposed by Charlie Baker, is a sine qua non for getting the state's budget back in order - and for implementation of any significant tax cuts. Left as it is, as Cahill proposes to do, the public pension system will continue to consume an increasing share of state and local budgets, edging out other spending and forcing never-ending tax increases just to keep pace with current obligations.

Treasurer Cahill certainly knows enough about the budget to know this, his utterly incredible profession of ignorance in today's Globe notwithstanding. It's a Catch-22 of Cahill's own making. To wriggle out of it he will eventually have to retract - or at least significantly revise - one of this month's bold statements. It will be interesting to see which he chooses.

2 comments:

  1. Interesting, I followed one of your links...I didn't know that Tim Cahill created a Job Growth Initiative, which leverages Treasury resources and works with banking partners to create jobs and affordable housing in Massachusetts. To date, $1.25 billion has been committed, including $590 million of leveraged capital from the Treasury. The Job Growth Initiative has created 7,500 new jobs and has the potential to create an additional 2,500 new jobs over the next four years...
    How many jobs has Charlie Baker "created or eliminated" at HPHC?

    ReplyDelete
  2. Thanks for the comment, Anonymous. It's great that in nearly a decade as the state's CFO, Treasurer Cahill has a few accomplishments to his credit. If only he had "enough insight into the budget," imagine all the good he could have helped do with that $1.25 billion...
    I also note that the text you quote directly in your comment comes from the 2008 version of the Treasurer's website... but he's still using that "$1.25 billion has been committed... 7,500 new jobs and the potential to create 2,500 new jobs over the next four years" language. Curious that two years into that four year projection, the numbers have changed not at all...
    As for Charlie, Harvard Pilgrim was in receivership when he took over. When he left, it had been voted the top health plan in the country for customer satisfaction for five years running. As you may know, in the private sector such bogus formulations as jobs "created or saved" aren't really tracked - people in charge of entities like HPHC have more important things to focus on. But there are thousands of employees at Harvard Pilgrim who probably have a good notion of how many jobs Charlie's turnaround of that company saved.
    Thanks again for the comment.

    ReplyDelete

No spamming, flaming, cursing, or other such nonsense tolerated. Thanks for engaging on those terms - Greg