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The Next Wisconsin



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I’ve been away from the Corner for a while, but I have a good reason. My conservative colleagues and I in North Carolina have been working hard on the 2013 session of the state legislature, which has the first Republican majority working with a Republican governor since Reconstruction. Hard hit by the recession, and underperforming the regional and national averages in economic growth since the mid-1990s, North Carolina’s economy desperately needs the mix of pro-growth policies now being fashioned and implemented in Raleigh. These include major reductions of the state’s regulatory burden, structural reforms in infrastructure spending and public education, and a pro-investment tax package now under negotiation in the general assembly that, if enacted, would constitute one of the most signficant state tax reforms in recent American history.

Not surprisingly, the Left is apoplectic. Liberals have long celebrated North Carolina as an outlier in the South, a sort of anti-Texas that prospered despite relatively high taxes and spending (particularly on higher education and Medicaid) and kept Democrats in power well after Republicans captured other Southern states such as South Carolina, Georgia, Virginia, and Tennessee. President Obama’s victory in N.C. in 2008 and near-miss in 2012 further raised progressive expectations. But even as demographic and other changes made the presidential race more competitive in the state, Republicans were making steady gains in state and local offices. The GOP captured both houses of the legislature in 2010, elected the state’s first Republican governor in 20 years in 2012, and won a majority of the state’s county governments for the first time ever.

Now that conservatives have their first opportunity in modern times to enact a reform agenda for North Carolina, the Left is going all out to try to stop it. I don’t just mean liberal groups and politicians within the state. As The Atlantic reports today, North Carolina has become the new Wisconsin for the American Left. Although the vast majority of weekly “Moral Monday” protests against the Republicans in Raleigh are North Carolinians, they’ve received lots of support and encouragement from elsewhere, including MSNBC and the like.

The proximate cause for today’s new round of national and international media attention is that North Carolina just became the only state in the union to end federal extended benefits for unemployment insurance. The national reporters don’t get the background quite right, however. Like many states, North Carolina has racked up a massive debt to Washington for UI benefits paid in excess of state UI funds. Because North Carolina’s economy remains stagnant and the state’s UI benefits were higher than the regional average, the new Republican legislature and governor fashioned a reform package to limit the effects of future UI tax increases, which are required by federal law for states with UI debts. North Carolina’s reforms include lower maximum weekly benefits and shorter benefit durations. While other states have received federal waivers to continue to participate in extended benefits despite changing their state benefits in violation of federal maintenance-of-effort rules, North Carolina was denied a waiver — apparently, the only state so denied. In any event, North Carolina’s new leaders understand that maintaining relatively high public-assistance levels, for both UI and Medicaid, is hardly a rational strategy for economic growth. Thousands of liberals may protest, and MSNBC may do a dozen more segments, but North Carolina’s reform agenda will proceed.

My Carolina Journal column today describes the current political moment in North Carolina as an inversion: “In Raleigh, the conservatives are confidently progressive and the progressives are desperately conservative.” Next up, adopting a Flat Tax and school vouchers. Neither is guaranteed. Back to work.



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