December 21, 2011

IN THE BUDGET Gov. Robert F. McDonnell (R) proposed this week, you can glimpse the future, and not just Virginia’s. The picture is not a cheerful one.

Mr. McDonnell proposed spending quite a bit more to shore up the state employee retirement fund and somewhat more to improve the deteriorating roads. Both increases are needed, and we applaud them.

But how does the governor propose to pay for them? By slowing state contributions to Medicaid and kindergarten through 12th grade education.

In other words: Children and the poor will suffer while the elderly and the middle class gain.

The trade-off is particularly acute in Virginia because Mr. McDonnell and the Republicans who control both chambers of the General Assembly refuse to consider any tax increases. Any sane transportation policy, for example, would include an increase in the state gasoline tax, which hasn’t gone up in a quarter of a century. A hike would help the environment as well as the state treasury.

But even blue-state governors more open to tax increases will be forced into trade-offs such as the ones Mr. McDonnell is proposing. As Montgomery County and Maryland are learning, there are limits to how high local jurisdictions can raise taxes without chasing business and wealth away. Even with the most rational health and pension policies and even if the tax system were changed to take a bigger bite out of the top 1 percent, the aging of American society will mean fewer working people supporting each retiree.

Unfortunately, current health and pension policies fall considerably short of the rational ideal, and the nation’s politics work against sensible reform. Radical change is not warranted: Public employees are not the overpaid shirkers that some conservatives make them out to be but rather hardworking, modestly paid public servants who are counting on their pensions to provide a secure but hardly lavish retirement. But by the same token, liberals, AARP and public-sector unions are too quick to oppose any modification to Social Security or their defined-benefit pension plans as an outrageous assault on the New Deal.

In fact, true progressives ought to favor reform. There should be more means-testing, for example, so that poor taxpayers are not subsidizing wealthier ones. Social Security’s cost-of-living formulas should be adjusted so that Social Security is not guaranteeing each successive generation more generous benefits, as is now the case. State employees could be asked to contribute a tad more to their retirement plans, to bring the public sector a bit closer to prevailing private-sector practice. That last idea, by the way, was proposed by Mr. McDonnell in the most recent legislative session and essentially shot down by his own party, proving that Democrats don’t have a monopoly on politics that work against the coming generation.

The maximalist opposition to any such changes may feel righteous and furnish a useful rallying cry. But, as the McDonnell budget demonstrates, the victims will be citizens without powerful advocates in the political system: the poor, and poor children most of all.