Friday, January 21, 2011

In Maryland, Budget Proposal Shows Why O'Malley Won Re-election

I openly admit that I was shocked by Maryland Governor Martin O'Malley's margin of victory in his re-election bid against former Governor Bob Ehrlich. I argued on this blog and in the pages of the Baltimore Sun and the Maryland Gazette that the race would be close. In the closing days of the campaign, the Washington Post and the Baltimore Sun released polls showing O'Malley ahead by 11 to 16 points - I dismissed both polls. I had no doubt that O'Malley was ahead, but double digits?  In one interview, in an unguarded moment, I pledged to eat my Blackberry if O'Malley won by 14 points... he won by 14.45 (at least I now have an excuse to get the new Verizon iPhone).

In the waning days of the race, as Ehrlich was losing momentum, I explained that Ehrlich had a very tough case to make. Martin O'Malley, a progressive Democrat by admission, had very much governed as a fiscal conservative. O'Malley's single flourish of progressive budgeting was evident in the 2007 special session of the Maryland General Assembly when taxes on businesses and individuals were raised resulting in $800 million in new revenue in FY 2009 - but even those tax increases were coupled with $500 million in spending reductions that same year - rather than a "tax and spend" liberal O'Malley was a "tax and cut spending" moderate.

Then came the Great Recession and a collapse in state revenue - since December of 2007 the state has realized $8 billion less in revenue than forecast. As revenue declined the state's budget deficits ballooned and O'Malley became a "cut spending" conservative. Since assuming office in 2007, O'Malley had presided over $5.6 billion in cuts to the state's General Fund budget - with the FY 2012 budget released today the record of spending cuts will jump to $6.6 billion. Those cuts, coupled with the 2007 tax increases, and roughly $1.3 billion in federal bailout dollars allowed the state to balance its budget every year (coupled with a multitude of additional cuts imposed by the Board of Public Works).

But current forecasts show Maryland $1.4 billion shy of a balanced budget in FY 2012, and with a newly elected Republican House of Representatives in Washington there will be no more federal bailout dollars. In the budget submitted today, Governor O'Malley doubles down on his record of spending cuts as he closes the deficit relying almost entirely on them. Fully $1 billion in savings comes from reduced spending, another $300 million comes from fund transfers, and only $150 million from projected increases in revenue. The budget also begins the process of dealing with the state's unfunded pension obligations and introduces a new, optional pension system for new employees.  It will now take longer for employees to be vested in the pension, early retirement age increased from 55 to 60, and benefit calculated on highest 5 years of salary rather than highest 3 years. Substantial savings will also be achieved by shift future retirees to the Medicare Prescription Drug Benefit - eventually I believe the state will have to abandon its defined benefit pension system, but O'Malley found a way to protect it at least for a few more years.

The 2010 midterm election was an election driven by concerns over the economy and concerns over seemingly irresponsible government spending. Martin O'Malley not only weathered the GOP tide that swept across statehouses in November, he generated a tide of his own. He was able to accomplish this not simply because Maryland is an overwhelmingly Democratic state, but because he has made some very difficult choices as governor. And, despite his progressive leanings, has presided over an era of very conservative budgeting.

With that record of fiscal management, what did Bob Ehrlich have to run against? What reason would Maryland voters have to defeat O'Malley? If you were a progressive voter seeking an expansion of government you may not have been happy with O'Malley - but Ehrlich was not an alternative. If you were a moderate seeking responsible budgeting, O'Malley was delivering. And if you were a conservative, you may have preferred even less spending and lower taxes - but here you would have been challenged by the fact that general fund spending increased dramatically under Ehrlich. Under O'Malley, the state has eliminated 4,200 positions and the ratio of state employees to state residents is at its lowest level in 40 years.

I will temper my praise for O'Malley's 2012 budget by making clear that I think more needs to be done to reform the state's pension system - namely it should be eliminated and replaced by a defined contribution system with no future state obligations. I also think that the Governor has already cut too much from Medicaid reimbursements and hospitals in the state - but on balance, I have a hard time imagining a more responsible and reasonable budget.

So yes, I was shocked that O'Malley won by 14 points... but on reflection, I shouldn't have been.

Friday, January 14, 2011

The Arizona Tragedy and the False Narrative of a Polarized America

There is a great write-up in the New Republic on just how bad the press covered the tragedy in Arizona and how it ignored a real problem (treating mental illness, seeing warning signs) while focusing on an imagined one (heated rhetoric).

The false narrative with regard to the shooting created by the press and opportunistic political leaders served to reinforce perhaps the greatest false narrative of our day, that the American public is polarized. There is little to no evidence that the general public is polarized - at least any more polarized now than at any point in the last 30 years. Rather we live in a two party system and the parties have become ever more polarized and controlled by partisan fringes. Polarized parties create the illusion of a polarized public.

As if on cue, Paul Krugman furthers the myth of a divided America today writing "One side saw health reform, with its subsidized extension of coverage to the uninsured, as fulfilling a moral imperative: wealthy nations, it believed, have an obligation to provide all their citizens with essential care. The other side saw the same reform as a moral outrage, an assault on the right of Americans to spend their money as they choose." Says Krugman, "There’s no middle ground between these views."

There of course is a middle ground between those views and it's the ground upon which a plurality, perhaps a majority, of Americans reside. What Mr. Krugman means to write is that for the political class, such as himself and Glenn Beck and Sarah Palin, there is no middle ground. But the political class is quite polarized and in that respect a poor representation of America.

Scholars like Alan Abramowitz have made a cottage industry of trying to prove that the electorate is indeed becoming more polarized. They cite as evidence the stark differences between self identified Republicans and self identified  Democrats on issues such as abortion, health insurance, aid to minorities, presidential approval and voting, and self identification as Liberal or Conservative.

When defined in that way, there is in fact evidence that Democrats and Republicans have drifted farther apart over the last 20 years - but as odd as it sounds, it does not demonstrate polarization. To paraphrase an old country song, folks are looking for polarization in all the wrong places. Morris Fiorina has explored polarization from the perspective of changes in popular opinion, separate from party labels and has found no increase in polarization.

When Americans are asked to express support or opposition for the supposedly polarizing policy areas cited by Abramowitz and Paul Krugman - health insurance, aid to minorities, government spending and services, defense spending, and abortion - Fiorina finds that there has been no increase in polarization on these issues in the past 20 years. In fact, Fiorina finds that the public has shifted slightly to the left on the issues government support for health coverage and the provision of services and slightly to the right on the issues of national defense and aid to minorities. There has been no change with regard to abortion. In other words, we're shifting together on some issues, not at all on others.

So what's going on, what are folks like Abramowitz really measuring? Simple, it's called party sorting. As the agendas of the political parties became ever more divergent Americans began to "sort" more neatly into one party or the other - and more Americans began to identify as either pure Independents or only loosely associated with a party.

As the agenda of the Democratic Party became more liberal and the Republican Party more conservative, liberal Republicans left the party and became Democrats or Independents and conservative Democrats became Republicans or Independents.

Krugman writes "Commentators who pine for the days of civility and bipartisanship are, whether they realize it or not, pining for the days when the Republican Party accepted the legitimacy of the welfare state, and was even willing to contemplate expanding it."  What Krugman has conveniently ignored is the fact that the Democratic Party once included many folks who rejected the legitimacy of the welfare state as well.

The following graph charts Congressional polarization from the 89th Congress through the 110 Congress, notice the considerable overlap in the middle that existed in the 1960s and through the 1970s.  There was a time when Conservative Democrats and Liberal Republicans were not anomalies. This helps to explain why legislation that today would divide the parties, the Civil Rights Act, the Creation of Medicare and Medicaid, even passage of President Reagan's first budget in 1981 were, in fact, bi-partisan affairs.

Today, however, there is no home in the Democratic Party for conservatives and no real home in the Republican Party for moderates - this is why Jim Jeffords bolted the GOP in 2001 and Joe Lieberman felt so ill at ease with Democrats back in 2006.

The parties polarized, the public did not. As Fiorina notes, there has been precious little change in the last 30 years with regard to the share of Americans who identify as Conservative, Moderate, or Liberal. Rather conservatives no longer feel comfortable in the Democratic Party and Liberals are no longer comfortable in the Republican Party - Moderates appear to be less comfortable with both parties.  The electorate is no more polarized now than in 1970, 1980, or 1990 - but the parties are. So of course 90% of Republicans vote Republican and 90% of Democrats vote Democrat. Of course Presidential approval correlates to party affiliation, it's the natural byproduct of party sorting, but party sorting is not the same as polarization.

The reasons for party polarization are many - the breakdown of mass-based political parties that operated as bottom-up entities driven often by local issues has played a role. Parties are now top-down entities controlled by a relative and ideologically similar few.

The increase in political competition has played a role as well. The Democrats lost their hold on the South, the Republicans lost their hold on the North East. According to data from State Politics and Policy Quarterly only 7 states had divided government in 1954, in 2007 that number stood at 23 states. With few exceptions, either party has fair shot at winning statewide elections in most states (remember, we vote for offices other than President). A recent study by political scientist Daniel Coffey determined that there is a direct and positive correlation between party competition and party ideology. As a state becomes more competitive between Republicans and Democrats the respective parties become ever more conservative and liberal.

V.O. Key hinted at this in 1956 when he argued that competition would force parties to offer more distinct policies to voters in an effort to influence their choice. Additionally, as competition increases the parties come to rely more heavily, not on the mean, median, or moderate voter, but rather on the more committed and active voter. For Democrats this means liberal activists and for Republicans conservative activists. This has the effect of pushing the parties ever farther to the extreme. This is, of course, what has happened.

Where is there evidence of polarization? Among the most engaged and active third of the electorate - what we call base voters, as they form the foundation of support for each party. Sadly this third has a tremendous impact on the direction and agenda of the two major parties. This third votes regularly and is more likely to contribute to and be active in politics. Parties and politicians seek to motivate these voters by painting every election as a choice between political life and death. Recall the closing days of the 2000 election when Al Gore suggested that "strict constructionists" like George W. Bush are little different from those who once deemed a black man to be but three-fifths of a person. Or the waning days of the 2008 campaign when Sarah Palin accused Barack Obama of "palling around with terrorists."

The goal for the left and the right is the same, scare the hell out your base to motivate them. So the left reduces the right to a caricature of bigoted, racist, violent, homophobic fascists and the right reduces the left to a caricature of immoral, anti-American, authoritarian socialists. The hope is that the scare tactics will motivate the base and win over wavering voters in the middle - remember, Democrats won Independent voters by 19 points in 2006 only to see Republicans win them by 19 points in 2010.

So America is not a deeply polarized nation on the brink of civil war. Rather, the American electorate is being poorly represented by a very polarized political class. A political class that sees the world in measures of black and white where there is "no middle ground." It is a pernicious myth that is doing great harm to America - and as we just witnessed in Arizona it all too often causes the political class to focus on imagined problems at the expense of real problems.

Sunday, January 9, 2011

American Politics: Electoral Realignment or a Model of Stability?

As part of a larger research project, I've been working on updates to Gerald Pomper's 1968 study of electoral coalitions by studying the linear correlation of state by state election results in paired presidential elections. According to Pomper an electoral conversion or realignment would be evident via a “change in the parties’ bases of support… the geographic distribution of each party’s vote would be different from the past: traditional strongholds would fall, while new areas of strength would become evident.” Such changes or shifts in support would be evident in statistical analyses of the correlation between sequential elections. High levels of correlation would indicate stability, and low levels change.

Though some have openly wondered whether the 2008 election of Barack Obama represented a political realignment, I contend that the political realignment of the late 1960s has been maintained, and is in fact incredibly stable.

Using election data for all states and DC since 1928 I have calculated linear correlations for all successive elections in the last 8 decades.  As shown in the first graph below, the correlations reveal the very stable New Deal realignment as well as it's collapse in the 1960s and the emergence of a new and stable electoral pattern - a realignment. The only disruption of that new stability occurred in 1976 with the election of Jimmy Carter, likely a reflection of fallout from Richard Nixon and Carter's strength in the south, in the midst of the southern realignment toward the Republicans.

What is unmistakable is that 2008 fit comfortably into the electoral pattern that emerged at the end of the 1960s - 2008 was very much a normal election, its correlation with 2004 and the average of 1992-2004 were both quite high. This suggests that no realignment, defined by James Campbell as "a durable and substantial shift in the parties’ national electoral balance of power,” took place in 2008.

I wanted to be certain that I was not missing more subtle evidence of realignment by focusing too much on national trends, so I next divided the states into three groups - Reliably Democratic states, Reliably Republican, and Swing states. Reliably Republican or Democratic states were defined as having voted with their respective party's candidate in at least four of the last five elections, through 2004. The designations were based on an analysis by the Population Reference Bureau conducted prior to the 2008 election.

This resulted in 39 states (including DC) that were not considered to be competitive. The remaining 12 states were coded as swings.

As shown in the following graph, I found a high degree on stability in the Democratic states (light green line)through 2008, lesser but still high stability in the Republican states (red line) and in the swing states (blue line) I found high levels of correlation from one election to the next only when a president was re-elected, or succeeded in office by a member of the same party. Conversely, elections that witnessed the defeat of an incumbent or a shift in party control of the White House was marked by lower correlations - until 2008. Swings state results were highly correlated with 2004.

The swing state finding for 2008 was intriguing given that George W. Bush won 11 of the 12 swing states in 2004 and Barack Obama only 5 in 2008.  I suspect the high degree of correlation reflects the closeness of the results across those swing states in both elections - even though the partisan outcome shifted in nearly half.

It is also possible that the high degree of correlation indicates some changes taking place in swing states. Six swing states (AR, KY, LA, MO, TN and WV) have not gone Democratic since 1996, suggesting that they may no longer be swing states.

I recoded those states as reliably Republican and it reduced the correlation coefficient for 2008 among swing states from the high .845 to a much lower .416 (no graph). The Republican correlation coefficient in 2008 declined slightly from .917 to .795.

The results appear to suggest that the Southern realignment that began in the late 1960s is complete as 4 of the 6 swing states recoded as Republican are southern states. In all, it suggests that the battlefield of swing states may be decreasing.

It's too soon to tell whether Indiana, North Carolina, or Virginia need to be removed from the reliably Republican column and added to the swing state group.

A recent blog post by Professor Andrew Gelman noted that there has been a decline in state by state vote swings, noting "the red-blue map is much more stable from election to election than it used to be." My analysis suggests that much of this stability results from the culmination of the southern realignment, the Democratic electoral coalition has been very stable since 1968 and the hiccups in the Republican coalition have involved southern states in elections with southern Democratic candidates. In recent elections, southern states once considered swing states (because they still voted for southern Democratic presidential candidates) seemed to have completed their journey to the Republican column - witness the failure of southern Democrat Al Gore to carry a single southern state in 2000.

The overall results from my analyses thus far do support my contention that a relatively stable electoral pattern emerged in the late 1960s and there is little evidence of any break in that stability. America remains in the post New Deal electoral system. A highly competitive system in which Republicans and Democrats are near parity and neither party dominates the political scene. Though Republicans have won 7 of the 11 Presidential contests between 1968 and 2008, Democrats have have enjoyed majority control in the House of Representatives in 15 of 22 Congresses between 1968 and 2010. And unified party control of the House and the White House has only existed for 5 of 22 Congresses.

Everett Carll Ladd labeled the post New Deal era the "No Majority Realignment." It's a fitting and effective description of an era that emerged in the late 1960s, and it appears, remained intact through 2010.