The 55-Cent Solution

SYNOPSIS: The Bush administration is planning to screw over NY on the $20 billion in aid that it promised

When Gerald Ford turned down New York City's appeal for financial aid, the front page of The Daily News screamed "Ford to City: Drop Dead." Those were the days.

These days, only diligent newspaper readers know that George W. Bush has backed off his personal pledge to provide aid to the battered city. And only serious policy wonks know that this is part of a broader picture that the economic measures now being discussed in Washington will impoverish state and local governments across the country.

Gerald Ford didn't really deserve that headline. He had never promised anything to a city whose fiscal woes were, without question, largely self-inflicted. Why should he have felt compelled to help?

This time, the story is different. Mr. Bush, you may recall, had a rocky couple of days after the terrorist attack. Some questioned his movements on Sept. 11; in New York there was some anger that he did not quickly visit the city. The White House responded to the first criticism with its story about a "credible threat" to Air Force One. More important, Mr. Bush quickly mended his fences in New York by promising members of the state's Congressional delegation that he would provide ample aid he told Senator Charles Schumer that the city had a "blank check."

Mr. Bush may not have been specific about the details, but all involved thought they knew what he had promised. Every news story I've been able to find from those early days declared that Mr. Bush would allocate half the $40 billion proposed antiterrorism package to New York. And this was widely regarded as only a first installment.

But last week the House Appropriations Committee finally filled in the details. And the antiterrorism package, which closely followed the administration's guidelines, contained only $9 billion for New York, less than half the promised $20 billion. In last-minute negotiations with irate Republican congressmen this was raised to $11 billion; but that's still only 55 cents on the dollar.

Administration officials say they will eventually provide the full $20 billion. But since they haven't kept Mr. Bush's promise to include that sum in the antiterrorism package, why should we believe them? As the memory of the attack recedes, as the administration returns to its pre-Sept. 11 embrace of hard-line conservatives which has pretty much happened already it becomes less and less likely that New York will see the rest of the money.

There may never be a specific day when the Bush administration tells the city to drop dead. Instead there will be vague promises, and then a lot of creative accounting for example, the costs of deploying the National Guard will be counted as part of the $20 billion. But more and more it seems that the aid New Yorkers thought they had been promised, the aid that was supposed to help rebuild the city, was a mirage.

As I said, this is part of a broader picture. The combination of an economic slump and the effects of Sept. 11 has placed state and local governments across the country in a severe financial squeeze. Since almost all state governments are required by law to balance their budgets, this will force draconian cuts in spending.

You might have expected the "stimulus" packages being floated in Washington to provide some help to state governments in this difficult time. On the contrary, they will compound the damage. Proposals that would exempt large chunks of corporate profits from federal taxes will also reduce the profits subject to state taxes. Next year, in all likelihood, will present quite a spectacle: big tax cuts for corporations and people who make more than $300,000 per year, even as desperate state governments slash spending with the biggest cuts falling on education and medical care for the poor.

Coming back to New York, what puzzles me is how little attention the story of the promise that wasn't is getting. In the weeks after Sept. 11, everyone took it for granted that there would be a great national effort to help rebuild the city. Now it is clear that this won't happen; the administration may claim to be providing what it promised, but New York will have to beg for every dollar of that $20 billion.

Where's the outrage? Have New Yorkers, of all people, forgotten how to complain?

Originally published in The New York Times, 11.21.01