Jindal must resist DC squeeze to follow optimal agenda

Results from an annual academic poll show that while Gov. Bobby Jindal does not at present have much to worry about concerning his political future in Louisiana he may face some danger to that ahead – courtesy of ideological opponents in Washington and at home.

Louisiana State University’s Public Policy Research Lab, as it does around the beginning of legislative sessions, inquired about some issues of the day. Among the revelations are:

• About half responding would like the state’s budget problems to be solved through tax increases and spending cuts, while slightly fewer would want to see spending cuts only which is Jindal’s strategy
• Solid majorities would like increases on a variety of taxes on vices, although Jindal opposed a steep increase last year on tobacco taxes
• A slender majority regretted the repeals (in two stages in 2007 and 2008) of income tax provisions that taxes “excess” federal deductions and higher rates at lower income levels, over twice as many who now agreed with it, and even more said these should be reinstated; Jindal hesitantly helped to lead the effective reduction of rates

Of course, one limitation in polling on complex questions like these is that few in the public typically understand fully the ramifications of the choices and their answers. It would have been interesting to have asked whether respondents believed they had benefitted from these tax reductions (a majority of taxpaying households did, although many probably did not realize it as the Louisiana media have a bad habit of incorrectly asserting that only “wealthy” households did), and how much money they thought might be raised by the proposed sin taxes (not enough to make much of a difference, even at the high level of the proposed tax last year). Knowledge of the facts behind the answers may have changed their distributions dramatically.

Regardless, it points to the political problem that may loom for Jindal. Cutting spending, even when there are reforms that can lead to more efficiency and changes in priorities that can get government out of spending in areas that really aren’t necessary for the public weal, creates pain for the clients who suffer service reductions or eliminations and those in government who may lose their jobs or power and privilege. Do enough of it, and opposition increases in size and intensity, which also can alter public perceptions of those not significantly affected by the changes and even those who (often not realizing it) benefit from them.

Thus, it’s easy in lean times for government to make a scapegoat out of Jindal’s insistence on letting government into people’s wallets less often. Jindal knew this in his first year in office when the tax cut train chugged into town as already it was clear a national economic recession was on its way that would adversely impact state revenues. This made him tentative to embrace tax cuts, which he probably envisioned closer to the end rather the beginning of his term, although finally he did perhaps thinking they would be a good economic stimulus to help ride out the difficulty.

But then he may not have anticipated that the federal government would fall into the hands of those working at cross-purposes with him. The intent of Pres. Barack Obama and his Democrat allies controlling Congress at present has been to take the current recession and use it as a “crisis” to expand the power of the federal government through laws permitting government control of more of the economy, increased regulatory burdens, and far greater government spending. The sum of these will prevent any substantial economic growth for the foreseeable future – which further will aggravate Louisiana’s revenue-raising difficulties.

The larger Obama goal seeks to turn public opinion into accepting the idea that only government, not the people themselves unshackled by government, can provide for economic growth, through its prolonging little-to-negative growth, thus empowering liberal Democrats at the country’s expense. The corollary of this political strategy uses poor economic performance to punish conservative politicians in the states like Jindal, seeking to have them take blame for attempts to limit government size and power. National policy they believe will force conservatives eventually into repudiating conservatism in policy.

Specifically in Jindal’s case, that would mean national policy that causes economic performance to drag and pressuring state budgets either would cause discrediting of tax cuts and spending cuts, or that Jindal will cave in to demands that taxes be increased, or both. Jindal must understand that this dynamic and hold fast because the worst thing that could be done in the current economic environment is to make job-killing and productivity-suppressing tax increases.

He also must realize that time is on his side. Obama is looking more like a one-term president while the odds are getting close to even that both chambers of Congress will be in Republican hands next year. Therefore, in the short term damage will abate, and in a few years restoration of the American economy can be well underway. It would be fascinating in four years for some of these same questions to be asked, for by then if the present tides of political and public sentiment do race across the landscape, Louisiana’s fiscal picture (with some good reforms now proposed) will be much brighter – significantly more than if Jindal abandons his present course.

Jindal should expect no help from the elites in control in Washington now, nor from their liberal allies in the state in government, the media, and among other special interests. It will take commitment and leadership for him to pursue this course even as history and theory show it is the optimal course because of their opposition. They will try to distract from that and political pressures will mount, as the survey results show potentially can portend. Yet to date Jindal shows no signs that he will fail this test.