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GUEST COMMENTARY: National recovery is real, though little noticed

Tuesday, February 11, 2014 | 3:38 p.m. CST

Do you like surprises? I have two for you:

At least 19 states already in 2014, nearly half, are posting budget surpluses. Yes, surpluses.

The other surprise: Since Obama took office, the national deficit has been reduced by one-half. The media are not missing these stories. We've heard so little about them because the partisan, negative, atmosphere in Washington drowns out good news.

The truth is that we are experiencing recovery. This news isn't coming from partisan sources, either. At least three different private-sector research tanks have published the same conclusions, spanning two years.

The surpluses and deficit reduction are no flukes. Let's start with the deficit reduction, because it is a simple fact five years in the making.

The Congressional Budget Office, the nonpartisan fact-finder for the U.S. Congress, released a report that showed the National Deficit is at $514 billion dollars, down from last year's deficit of $680 billion. That's a 37 percent reduction in one year.

Obama inherited, as we all know, an unprecedented financial crisis, which the Government Accountability Office said cost the U.S. economy over $22 trillion.

The fact is the deficit has been falling steadily since 2009. The irony is that the public thinks it hasn't shrunk at all. A HuffPost/YouGov poll found 54 percent of the public think the deficit has increased since Obama took office.

Only 19 percent of the public is aware he has cut the budget deficit by over half. The Obama administration's focus on economic growth, which economists agree is the fastest method of decreasing deficits, has indeed led to its intended outcome.

Unfortunately, the president hasn't gotten any political benefit from decreasing deficits. State surpluses are being attributed to two things — national economic growth and an increase in state's personal income taxes.

Incoming revenues from state income taxes are outpacing spending. It is the mix Obama has been practicing and advocating, a balance between cuts and new revenues.

There is one caveat: Wealthy taxpayers, anticipating federal income tax increases in 2013, shifted income into 2012 to take advantage of the lower taxes, resulting in a bonanza for the states' personal income taxes.

Now, state governors and legislatures are debating about what should be done with the budget surpluses. Their plans, to the surprise of many, often cross party lines. With Congress all but a useless appendix to the federal government, virtually everybody else — voters, mayors, governors and the president — is using workarounds to do the job Congress should have done in the first place.

Some governors are proposing tax cuts like Republican Govs. David Heineman and Scott Walker of Nebraska and Wisconsin, respectively, and the Democratic governor of New York, Andrew M. Cuomo.

There are also a number of governors who want to allocate some of their surpluses to education. The New York Times reports the Republican governors in Georgia, Idaho and Kansas, along with Democratic governors in Missouri and Colorado, are all strongly advocating substantial increases in spending for education.

"Next to their parents, the adults children see most in their life are their teachers. We should support our teachers with additional pay," the Times quoted Republican Gov. Susana Martinez of New Mexico.

There is a welcome thawing around steel-rods-embedded-in-Arctic-ice partisanship in the state houses of our nation. A focus on pragmatism and working together is taking hold at the grass roots of government.

The state with the most dramatic turnaround is California, which has runs billions of dollars in deficits for over a decade. The worker of magic here is Gov. Jerry Brown, who put his office on the line in asking voters to approve a temporary tax increase.

It worked. They approved, and California is projected to show a $1 billion surplus in 2014-15, increasing to $9 billion by 2017-18. Brown wants to put the money in a "rainy day" fund.

He joins 23 governors who proposed rainy-day funds last year, and 19 governors who deposited surpluses in rainy-day funds this year.

Governors are shunning ideology for pragmatism — an approach Obama has been practicing as well. It's paying off. But you'd hardly know it.

Donna Brazile is an American author, academic, and political analyst who is vice chairwoman of the Democratic National Committee. Her column is distributed through the United Feature Syndicate.


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