Winter of DiscontentBy
Deborah Kaplan
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All of Governor Engler's aides wear Ultra Brite smiles &emdash; that is, until there is the slightest deviation from the program. Then smiles rebound into grim, thin-lipped lines, doors slam, staffers dash in all directions as if their synapses had short-circuited. The governor, it seems, is running late. As he bustles into a room where two reporters are waiting, he has an aide at his side whose sole function, apparently, is to keep time. The reporters had requested a 15-minute interview with Engler, and the aide, her wrist held out, studies her watch to ensure that not one minute more elapses. The governor is a man on a time-managed mission. Engler's mission is to "downsize government," a phrase so oft-repeated it now has an almost liturgical ring. The Democrats' term for it is "dismantling government" by cutting and consolidating beyond what's required to offset the state's $1.1 billion deficit. And turmoil is the word for what's happening in Lansing. Engler's campaign promise was to do more in his first eight weeks in office than former Governor Blanchard did in eight years, and Democrats say he has indeed launched what amounts to "an ideological attack on state government." Thousands of recipients of Aid to Families with Dependent Children (AFDC) are already feeling the brunt of the blow, with 17 percent cuts to their checks. The winnowing out of art funding &emdash; what the Engler team regards as another "handout" &emdash; is forcing museums to shorten hours, theaters and galleries to cancel performances and shows. The entire state is being reshaped, and lawmakers are expecting more radical surgery yet. They say Engler has ordered his department heads to make another 15 percent cut to their budgets for fiscal 1992. And if the Headlee Tax Cut initiative &emdash; mandating an immediate 20 percent property tax rollback &emdash; is approved by the Legislature, the state will have to find some way to pay for that. In addition to those rounds of cuts, Democrats charge that the Engler team is selectively interpreting the Legislature-mandated 9.2 percent, across-the-board cuts to wipe out welfare programs within line items. Because federal law doesn't allow cuts exceeding 5.2 percent to such federal-state matching programs as Medicaid, those funds will be eliminated completely. Even Engler appointee Gerald Miller, director of the Department of Social Services (DDS), calls the outcome catastrophic: "People would die, as simple as that. ... They would die."
John Kost, deputy director of DSS, says "people are going to need to learn to be survivors" in the new world order that Engler is creating. Privatizing and property tax cuts will spur business growth. That, in turn, will give the entrepreneur &emdash; cast in the mold of Horatio Alger or, better yet, Henry Ford &emdash; his place in the sun. As for the 100,000 General Assistance recipients who risk losing their toehold on bare subsistence if their benefits are cut off, Engler told the Metro Times, "They should go to work." That is the essence of Engler's so-called "taxpayers' agenda," touted during his campaign and in his inaugural address as revitalizing and refreshingly new. Mayor Young calls it warmed-over Reaganism. "It's textbook straight-out-of-the-editorial-columns-of-the-Detroit News," he says. "Let the market rule." Michigan House Democrats and social service advocates who are suing the state to stop welfare-funding cuts say that Engler's plan is simply to make the poor pay for tax breaks for the rich. Welfare cases, surplus labor pools and rust-belt cities like Detroit, Flint and Battle Creek are cut out of the picture; they spoil the symmetry of the plan. Some of Engler's opponents go even further. They say that behind the taxpayers' agenda is a hidden one &emdash; hidden in the sense that it is going forward without news media coverage, public debate or even the public's awareness. As former state treasurer Robert Bowman says, "The fiscal issue is a sideshow. It ain't the real story in Lansing." The real story, opponents say, is Engler's attempt to radically overhaul state government to conform to a right-wing, "free-market" ideology espoused by certain of his informal advisers &emdash; mostly directors and policy analysts from the Mackinac Center for Public Policy, a right-wing think tank based in Midland. The think tank's corporate contributors include Dow Chemical and Dow Corning. Engler had helped to create the think tank when he was on the board of the nonprofit Cornerstone Foundation in Lansing. In 1987, Cornerstone gave $38,000 in seed money to Mackinac, as the Detroit News revealed in a story that ran late in the governor's race. Incorporation papers show that Mackinac continues to operate under the auspices of Cornerstone, whose current directors appoint those of the center. Mackinac Center directors Robert Teeter, Richard McLellan and D. Joseph Olson are among those described by Democrats as Engler's "hidden advisers." Teeter is President Bush's campaign strategist and pollster. McLellan, a managing partner of Dykema, Gossett in Lansing, was an aide to former Governor Milliken who broke with Republican moderates to back Richard Headlee's 1982 bid for governor. Olson is vice president of Citizens Insurance in Howell. Tax records show that McLellan and Olson are also on Cornerstone's board. Engler, says Rep. David Hollister, D-Lansing, "has surrounded himself with Mackinac Center people ... people who hate Governor Milliken and worship at the feet of Ronald Reagan and the supply-siders." As a legislative aide puts it, Engler "has surrendered himself to those ideologues who want to downsize government." Almost point for point, Engler seems to be following the Mackinac Center's prescription for "downsizing," as spelled out in its policy papers and studies: Cut property taxes and privatize as many of the state's functions as possible, or deregulate or dump on counties or cities what can't be contracted out to private companies. Both tax cuts and privatizing would be boons for business and, the theory goes, what's good for business is good for the state. Democrats say Engler's moves &emdash; his rounds of budget cuts targeting human services like Medicaid, dozens of executive orders consolidating divisions, wholesale sacking of staffs like that of the Office on Aging &emdash; are hitting the floor with such velocity they're leaving both the House and the Republican-led Senate reeling. "I don't even know what to do anymore, with the way these things are coming down," says Sen. John Kelly, D-Detroit. "There isn't any real opposition in the House." The role of opposition leader has fallen to House Speaker Lewis Dodak, who has repeatedly tried to negotiate with Engler on the Democrats' plan to take $333 million out of the "rainy day" fund to avert mass layoffs and cutbacks in DSS. The governor vetoed most of the bill's provisions. "It takes two to tango," says Dodak's press secretary Stephen Serkaian, "and the Engler administration refuses to come to the dance. Everything the speaker wants, or even some of what the speaker wants, is nonnegotiable &emdash; off the table." Hollister says the combativeness exceeds anything he saw under the previous Republican administration of William Milliken. "We went through seven executive orders &emdash; cut the budget seven times &emdash; under both Milliken and Blanchard, and there was always this sense that we were in this together, that the governor wanted to work collaboratively with the Legislature to minimize the layoffs, the pain," he says. "It's completely different now. We offered solution after solution, and the governor says, 'No, we're not going to do it.'" Even Republican moderates are surprised by the fanatical bent of their old colleague. "He is going farther than I would have imagined," says Sen. Paul Hillegonds, R-Holland. "In the years I've known John Engler, he has served as a legislative leader who had to engage in the give and take of the legislative process. He was a good negotiator, but ultimately he had to compromise. Now, the executive side of John Engler and his philosophy is showing through." The 20-year Senate veteran had always been known as the consummate operator, "a hardball politician, an insider politician," as Rep. David Gubow, D-Huntington Woods, says. "I don't think anyone realized how bad an ideologue he was," Hollister says. "Nobody cared who'd run for Republican governor because Blanchard looked undefeatable a year ago," Hollister says. "Then Blanchard shot himself in the foot, he ran a very stupid campaign, and suddenly this unknown Engler is the governor. He built his campaign around the Mackinac Center &emdash; a lot of his rhetoric came out of that. He needed a program, he didn't have a program, and he grabbed theirs." Is Engler using Mackinac, or being used to promote the center's agenda? "Certainly there's a symbiotic relationship," former state treasurer Bowman says. "Engler's a smart guy, he's his own guy &emdash; he's not some sycophant drawing on the Mackinac Center. I just think it's a confluence of two groups who think alike." Engler, with a handful of other Republicans, had pushed for years to create a free-market think tank like Mackinac, according to the center's secretary-treasurer, McLellan. "There were those of us who believed policy-making in Michigan was dominated for so long by the UAW, Solidarity House &emdash; a liberal orthodoxy that constrained debate on public policy issues," he says. "The question never was, should we be a welfare state, but rather, how big should it be." Because of its Republican ties and attacks on Blanchard's programs &emdash; particularly the Michigan Education Trust (MET) and Home Ownership Savings Trust (HOST) &emdash; Democrats charged the center was a GOP sham. Public policy research groups like Mackinac are supposed to stay nonpartisan or they risk losing their tax-exempt status. But Greg Kaza, the center's vice president for policy research, says Mackinac didn't politic to get the state's major newspapers to editorialize against MET and HOST. Rather, "We aggressively marketed our idea." Was the "idea" to boost Engler into power? No Democrat would credit Mackinac with that much clout. Kaza says Blanchard and Bowman had tried to paint the center as "a front for John Engler." But he says Mackinac is to Engler what the Brookings Institution was to Carter and the Heritage Foundation to Reagan &emdash; a source for ideas. In the Detroit News story first tying Engler to Mackinac, the then-gubernatorial candidate said his connection ended with helping to get the center started. "I've never served on the board," he was quoted as saying. "I rarely even talk to people who are associated with the center." He may not have served on Mackinac's board, but corporate records show that fellow Cornerstone directors McLellan and Olson did and continued to do so at least through 1990. And Engler has done more than "talk" to people associated with the center &emdash; he has given its senior policy analysts key positions in his administration. Mackinac's Gary Wolfram is now a deputy state treasurer, and John Kost, deputy director of DSS. "The Mackinac Center hasn't really influenced me so much as I helped to create their analysis of what should be done in the area of social services," Kost says. As for McLellan, he headed the governor's transition team and recently won a spot on the Department of Corrections Commission &emdash; the same commission Engler is trying to abolish so that he can take direct control of the department and prisons. "It may be that the Mackinac Center &emdash; its orientation &emdash; may drive, may suggest some of the ways the Engler people may go," McLellan says. "Who knows? ... But I wouldn't say there was a coterie of Republicans behind the governor, framing his policy." Asked about the extent to which Mackinac influences his policies, Engler would only say: "I think highly of the Mackinac Center for Public Policy because I think they've done an important service for the people of Michigan, with some of the work and studies they've done on privatization. ... "I think it's important in politics to take advice and hear what people are saying across the spectrum &emdash; there are lots of ideas." As for Mackinac's ideas, the center's policy analysts continue to peddle them in opinion pieces that regularly appear in conservative newspapers like the Detroit News. But the center's policy papers and studies reveal much more of Mackinac's worldview. In a recent paper titled "Road Map for a Michigan Renaissance," the center recommends that the new governor rein in the commerce department by wiping out its "barely disguised boondoggles": among them the strategic fund, the Chrysler-Jefferson grant and much of the Detroit and outstate equity programs. The governor should abolish HOST, "reconsider" MET, privatize the corrections department by hiring outside companies to operate prisons. The paper suggests that such environmental problems as hazardous waste disposal could be deregulated or turned over to counties or municipalities to handle. As for Detroit, what the city needs is "dialogue, not bailouts." The paper says the state should "empathize" with the city's problems, but "the city's heavy reliance on favors and subsidies from Lansing must come to an end." The theme is taken up in "Michigan: An Agenda for the '90s." Vice President Kaza says the center's policy analysts are scheduled to meet with Engler to discuss this latest effort. The study blames Detroit's Great Society mayor, Jerry Cavanagh, for liberal programs like HUD that stifled entrepreneurship and killed the city. It berates Lansing for continuing "to pour millions of taxpayer dollars down the Detroit rathole." "They view Detroit as (populated by) a manipulative group of people who are out to exploit the system to their benefit," says Democrat Kelly of the Mackinac Center. "It's a bunch of upper-middle-class, white ideologues who really don't have any experience with cities or diverse social groups and have a narrow perspective on what civilization is. "They really believe in the Protestant ethic &emdash; 'We've been able to pull ourselves up by our bootstraps, so why can't everyone else' &emdash; when in fact they come from privilege. John (Engler) in fact comes from a small town &emdash; he's never represented a Flint, a Detroit, a Pontiac. ... Coming from small towns and little islands out in the lakes, that in and of itself says something about them." What is says, according to anti-tax crusader Richard Headlee, is that Engler "believes in a day's work for a day's pay; what's right is right and what's wrong is wrong. It's the kind of ideology you find in rural America. It's a refreshing value for a politician. I love him, I just love him." Headlee has reason to. Engler was co-chair of Headlee's 1982 campaign for governor. Headlee, chief executive officer of Alexander Hamilton Life, was a major contributor to Engler's campaign. He is also the author of the Headlee Tax Cut initiative which, if Headlee's signatures are certified by the State Board of Canvassers and the initiative is approved by the Legislature, would cut all property taxes by 20 percent. Engler, says Headlee, "has been a 100 percent, absolute supporter of what I believe in for as long as I can remember." In Headlee's view, Detroit is "one massive entitlement scheme down there, with everyone skimming some off." As for welfare itself, Headlee says, "It's rewarding failure. You don't let people starve, but they don't have to wear Burberry coats, either. We've given people money for having babies; we've given them money for not working, so why work? ... It's the liberal notion that you satisfy your conscience by giving someone else a third party's money. You can't build society on that." And what kind of society will Engler build? That, say his critics, is the question.
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