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Summer 2014
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By Steven Malanga:

Shakedown: The Continuing Conspiracy Against the American Taxpayer

By Steven Malanga, Victor Davis Hanson and Heather Mac Donald

The Immigration Solution.

By Steven Malanga
The New New Left: How American Politics Works Today

Eye on the News

Steven Malanga
Empire State Dreamin’
Here’s why a Democratic congress won’t help New York.
10 November 2006

The Democratic sweep of both houses of Congress has New York’s congressional delegation and its supporters boasting about their new, supposedly unprecedented influence in Washington and the goodies they’ll be able to bring home to New York.

“I haven’t seen a state that stands to benefit more from Tuesday’s results than New York,” a state Democratic Party spokesman told the New York Times earlier this week. Meanwhile, Harlem Congressman Charles Rangel, who will chair the Ways and Means committee in the re-aligned House, suggested that New York can now expect a pot of gold from federal money redirected away from Republican states like Mississippi and toward the Empire State. “Mississippi gets more than their fair share back in federal money, but who the hell wants to live in Mississippi?” Mr. Rangel said in his uniquely obnoxious way.

The proper response to this swaggering should be: “In your dreams, fellas.” New Yorkers have heard these kinds of predictions from their Democratic members before, and they never come true. That’s largely because the state’s Democratic delegation, and especially its Gotham members, are so far to the Left that in a divided Washington, where compromise and moderate legislation often succeed, few bills of any consequence sponsored by New York members get very far. That could be especially true in the next Congress; Democrats seized control of it by running moderate candidates in vulnerable GOP districts—in effect bolstering the Dems’ moderate caucus in Congress.

If ever New York’s congressional delegation should have been influential, it was in the early years of the Clinton presidency, when Democrats controlled both houses of Congress and the White House. But instead, the New York delegation wound up on opposite sides of the President on many key issues. Indeed, virtually the entire New York Democratic delegation voted against Clinton on one of the most important initiatives of his first term, the North American Free Trade Agreement, forcing him to construct an alliance based on moderate Democrats and Republicans to pass the trade pact.

Later, New York’s congressional delegation resisted Clinton on the capital gains tax cut that ultimately spurred Wall Street and boosted the city’s economy. Members of the Gotham Democratic gang tried to derail the tax cut, calling it a gift to the rich, and only later supported it when the President cut it in size. It took moderate Democrats and Republicans from other parts of the country to engineer the 1997 investment tax cut package that so dramatically benefited New York.

By contrast, the Gotham delegation’s most important contribution to the agenda of the Clinton years was Rangel’s legislation establishing urban enterprise zones, including one in Upper Manhattan that quickly became entangled in controversy when its directors were found to be funneling most of the federal money into politically friendly social service groups rather than into economic development. Not surprisingly, the zones had little impact on their communities and, though touted as Clinton’s major urban initiative, faded from public awareness.

Even more telling, when Gotham’s congressmen proposed to President Clinton a $1.7 billion list of then-mayor Dinkins’s pie-in-the-sky local spending projects, the White House took no notice.

Nor did New Yorkers do particularly well in “redirecting” aid to the state and city during the years when Democrats controlled Congress and the Presidency. As the late Senator Daniel Patrick Moynihan often observed, New York sends far more money to Washington than it receives in federal spending, and that so-called “flow of funds deficit” has continued to grow no matter which party is in power in Washington. That’s because New Yorkers, whose incomes are on average higher than those of taxpayers in most other states, pay disproportionately more in federal taxes, since our country’s progressive income tax bites harder in New York. Yet New York’s congressional delegation consistently votes against tax cuts that would leave billions of dollars here and might reverse the flow of funds deficit.

Instead, the New York Democratic delegation mostly argues that Washington should be sending more money to the state and city in the form of federal programs, because by their logic, apparently, funneling money from New York to Washington and then back to New York again is better than simply leaving it here.

That argument rarely gains much traction in Washington, however. And no wonder: New York’s federal spending deficit largely results from a lack of defense contracts here, because the state (and even more so the city) simply doesn’t have (and doesn’t want) much of a defense industry. In addition, most federal spending studies count Social Security payments to residents and retiree benefits for federal employees as part of the flow of funds from Washington, and since high-death-tax New York is not exactly a mecca for retirees, the state and city get less than the national average in these payments.

But on the social programs that the New York Democratic delegation loves, the state and city already get more than their fair share and aren’t about to cash in much more. In Senator Moynihan’s annual study of where federal spending goes, New York typically ranked number one in per capita spending for social programs. By contrast, Mississippi (to take Rangel’s example) received about 25 percent less per capita in social program spending than New York, though Mississippi has a higher poverty rate.

The city, in particular, already gets a huge premium from this spending. Several years ago I broke down federal spending on a host of social programs and found that the city received nearly four times the national per capita average of welfare expenditures, three times the average in Medicaid, and twice the average in subsidized housing spending. The city even received far more per capita than other major cities like Los Angeles and Chicago.

Consequently, there is no major pot of gold waiting for New York, only perhaps a few more scraps of pork sent our way. At most, an old Lefty like Rangel may be able to use his chairmanship to block GOP legislation, but that isn’t the same as promoting an agenda that actually benefits New York. But after waiting so long to get back into power, the Charlie Rangels of the world no doubt need to beat their chests a little for effect.

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