In Okla., a beneficiary sours on federal spending

Lawyer John Hager paid scant attention as Congress and the White House raced against the clock to strike a budget deal that narrowly averted a government shutdown.

As the budget battle moves into its next phase in the coming weeks, he hopes lawmakers will cut the federal budget by much more than the $38 billion trimmed in the current spending plan. The less federal government, he said, the better.

“Centralized anything doesn’t really work,” Hager said, adding that he was unperturbed by the prospect of a federal shutdown. “I’m not sure what they do has a big impact on my life.’’

That jaundiced view of the federal government is common here, local leaders say, even though the region’s surging economy is built to a large degree on a foundation of federal spending.

About 7 percent of the area’s workers are federal employees, more than double the U.S. average, according to a Washington Post analysis. Meanwhile, federal spending on roads, a huge Federal Aviation Administration center and a sprawling Air Force base not only keeps more than 20,000 civilians employed but also is helping to nurture entire sectors of the area’s increasingly prosperous and diverse economy.

Overall, the state gets back $1.35 for every dollar its residents and businesses pay in federal taxes, according to the Tax Foundation, a nonpartisan tax research group. That’s the 15th most generous return among the 50 states.

“On one hand, you have this fairly heavy concentration of federal employees and spending here,” said Cindy Rosenthal, a University of Oklahoma political scientist and mayor of nearby Norman. “On the other hand, there is a lot of sentiment that the federal government is too large, too intrusive and probably too wasteful.”

Reconciling these competing realities has emerged as the defining issue in Congress, where the debate has swung from President Obama’s desire to boost spending on services including education and alternative energy to how much to cut the budget and taxes. Congress has not revealed which programs will be cut in the deal reached Friday, but Oklahoma City could have a lot to lose when details are released this week.

“There is no question that government jobs are great ones to have in a community,” Oklahoma City Mayor Mick Cornett said. “They are stable, people have benefits, and there is little turnover. Losing a lot of them would hurt.”

Cornett said that as federal lawmakers went back and forth in budget negotiations with a possible federal shutdown hanging in the balance, he never heard anyone talk about it. “I think the sense was that it would not affect them at all,” he said. Yet Cornett acknowledged the crucial federal role in the region’s growth, even if many voters do not see it. Given what he called the area’s entrepreneurial bent, the mayor said, his city would probably withstand large cutbacks in federal largess “better than most places.” Still, he said, a big reduction would pose significant problems.

In 1995, Oklahoma City became a target of the extreme antipathy some people feel toward the federal government, when domestic terrorists detonated a truck bomb that destroyed the downtown Alfred P. Murrah Federal Building and killed 168 people. Residents here were horrified and came together to condemn that crime.

But analysts say it also is true that skepticism toward the federal government in Oklahoma — where Obama won no counties in 2008 — is deep.

“With government, too much money goes to special-interest groups,” said Bud Rogers, an oil-field supervisor from Elk City. “I sometimes wonder whether government makes any difference economically, at least to me.”

Rep. James Lankford (R), a freshman member of the House Budget Committee from Oklahoma City who favors deep cuts in federal spending, said that while government plays an important role in his state, it still needs to be reined in. “We have a very large federal military presence and a very large overall federal presence with the FAA,” he said. “These are friends and neighbors. I know these people. But we have to make government more efficient.”Lankford said that even many federal workers complain to him about “inefficiency they see up close and personal.”

He also said that business owners and others object to stifling regulators who look to punish violators rather than simply bringing them into compliance with complex federal rules. “They just have no mercy,” Lankford said.

Oklahoma’s congressional delegation is known as the most conservative in the nation. In the last election, Republicans swept nearly 70 percent of the state legislative seats, and Gov. Mary Fallin (R) has come under fire from fellow conservatives for moving to set up the state insurance exchange required by the health-care reform law enacted last year. Fallin has said the exchange will help consumers save money by increasing competition among health-care companies. Opponents criticize her for enabling “Obamacare.”

But if that skepticism is growing, so, too, is the federal presence and its role in the economy.

Oklahoma City’s image may be steeped in independence and energy, symbolized by the working oil wells that surround the state Capitol. Yet one of the fastest-growing sectors of the local economy is the aviation industry, which economists call an outgrowth of the work done at two large federal outposts: Tinker Air Force Base, which employees 14,400 civilians, and the Mike Monroney Aeronautical Center. The center, named after the late congressman and senator who sponsored the law creating the FAA, trains air traffic controllers and others from around the country and is where private planes are registered. It employs more than 7,000 people.

In addition, the city’s standing as a major transportation hub is due in no small part to its location as a crossroads for three major interstate highways, which were built with federal money. Currently, the city is rerouting a section of Interstate 40, opening up 750 acres of land for new development and a planned park — work being done with federal help. And the state’s booming energy sector as well as many of its farmers benefit mightily from federal subsidies.

The federally fueled economic mix has helped the city withstand the recession better than most places. Overall, Oklahoma City has a 6.2 percent unemployment rate, the second lowest among the nation’s metropolitan areas with populations over 1 million, behind only Washington, D.C.

While many residents have a negative view about the federal government, Cornett said, voters here seem to be more supportive of state and local government. That contrasts with battles being fought in state capitals such as Madison, Wis.; Columbus, Ohio; and Albany, N.Y., over deep budget cuts being proposed or imposed, and efforts to curtail bargaining rights of government workers.

In recent years, voters in Oklahoma City have extended a sales tax surcharge that helped fund the Ford Center, the basketball arena where the city’s NBA team plays, and renovations of the city’s public schools. It also paid for other projects, including convention center improvements, a downtown library, new bike and walking trails and development of the Bricktown Canal, which links the city’s thriving nightlife district to downtown.

“There is anxiety overall about spending,” said Cornett, a self-described conservative. “But that exists more at the federal level, less at the state level and even less at the local level.”

Database editor Dan Keating contributed to this report.

Michael A. Fletcher is a national economics correspondent, writing about unemployment, state and municipal debt, the evolving job market and the auto industry.
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