When Rahm Emanuel swept into the mayoralty of the Second City in February, taking a clean majority in the unwieldy nonpartisan-ballot free-for-all and thus avoiding an April runoff, the editors had this to say in NRODT’s “The Week”:

We knew the former ballerino could dance the White Swan that is campaigning, but governing Chicago will call for sterner stuff. The city is facing a 15 percent, $500 million budget hole that is growing even as Emanuel plans his transition. Fixing it will require taking on the city’s bloated public sector, following the lead of Democrats like Gov. Andrew Cuomo in Albany. Is Mayor Rahm up to it? We know he has a reputation for toughness, but the Chicago machine ain’t run by the Girl Scouts, either.

Indeed, that 15 percent, $500 million budget hole did grow, all the way up to $636 million, with no signs of slowing down. So how has Mr. Dead Fish, the champion campaigner and Washington power broker, responded to the fiscal challenges of a post-Daley, Great Recession Chicago? Among the handful of Democrats elected to executive positions after 2008, is he closer to the pragmatic, budget-cutting Cuomo, or (anti-) business-as-usual Jerry Brown of California?

Well, look at the top lines. Rahm has a $636 million budget hole to fill, and he’s proposed $417 million in cuts and $238 million in new revenue increases to fill it. Not bad for a Democrat. And a look at the details makes it seem less bad still.

The budget avoids raising property and sales taxes, and leaves a new city income tax (like the one in New York) off the table. It even reduces — and Emanuel has promised to eventually eliminate — the city’s “head” tax on businesses, which is really nothing more than an unmediated tax on job creation. So where is the new revenue coming from? A $1.78 increase in the city’s hotel tax, coupled with increases in parking and vehicle-sticker fees. While the increases could impact tourists and commuters in Chicago, they are also focused on what Laurence Msall of Illinois’s Civic Federation, a non-partisan tax-policy think tank, calls “avoidable expenses.”

“Focusing on user fees is far preferable to general tax increases, especially as the city struggles to deal with ongoing economic distress,” says Msall. “The positive of the fees is that they are for the most part tied to either avoidable expenses — in the form of parking downtown — or they’re tied to providing enhanced benefits to the city.” (Emanuel’s proposed water and sewage fee increases are directly tied to improving the city’s aged piping and other infrastructure.)

Nor does the mayor’s revenue forecast appear to be overly sunny. Projected revenue growth is 1.2 percent — a number Msall calls “reasonable and conservative.” The budget also builds in an extra $20 million for the city’s rainy-day fund — a surplus that gives Emanuel a small cushion should revenue fail to meet expectations.

What about the spending side? The good news is that Emanuel’s budget recognizes that the city’s financial problems are structural and extend beyond the recession-depleted coffers Chicago pols are wont to blame.

“The truth is that Chicago’s last ten city budgets have been in the red,” Emanuel told the city council last week in a speech introducing the budget. “Yes, the Great Recession added to the crisis. But when budgets don’t cover expenses year after year, it’s clear we have a structural problem. Chicago cannot afford this type of government any longer.”

Indeed, Mayor Richard M. Daley’s budgets were full of one-time fixes and gimmicks, and, most notoriously, took just two years to blow through nearly a billion dollars in receipts from a 75-year deal to lease the city’s parking meters. But Emanuel’s budget, at least, trims the fat. The city will take 2,000 job vacancies off the books and lay off over 500 public employees in middle management.

Like Newark’s Democratic mayor, Cory Booker, Emanuel is also making cuts to the police budget, although fairly politically safe ones. It will consolidate police and fire bureaucracies and close three dilapidated police stations, folding their operations into newer facilities. This may be more significant than it appears, since police and fire budgets were routinely held harmless under the Daley administration.

But the bad news — and it’s really bad news — is that Emanuel hasn’t done anything substantive on public-employee compensation, which between salary and benefits constitutes 75 percent of overall city expenditures, and is responsible for the ticking time bomb of the city’s dramatically underfunded pension liabilities. The reason is as obvious as it is disheartening: Public-sector-compensation reform is hard. Candidate Emanuel had to overcome perceptions that he was anti-union dating back to his days in the Obama White House (“F*** the UAW” — Rahm), and he will need broad public-sector buy-in to corral the city’s notoriously balkanized politics. But Rahm can’t have it both ways. Chicago won’t be solvent until something can be done about the public sector. And while he may be favorably compared with the likes of Jerry Brown, whether he has the will to be a Chris Christie or a Scott Walker is another question altogether.

For now, groups like the Civic Federation, which though technically nonpartisan has a long history of supporting tax simplification and reform, privatization, and rooting out government waste, are giving Emanuel a cautious thumbs up. Msall’s group stridently opposed Daley spending, but Msall says — stressing that this analysis is only preliminary — that the Emanuel budget “directionally moves the city in a much more positive position.”

And what of Emanuel’s dance partners in all this, the 50 aldermen of Chicago? They are unpredictable, if for no other reason than that they were used to taking their marching orders from Richard Daley. This included rubber-stamping years of budgets the city couldn’t afford. Without the Daley machine keeping its gears greased, will enough of the aldermen — who, after all, own the city’s miserable finances more than anybody — get behind Rahm’s plan? Smartly, Emanuel included the councilmen in the process, and reportedly worked very closely with budget-committee chair Carrie Austin in crafting the document. So the council’s leadership wasn’t blindsided when the budget was rolled out. And they might get behind Rahmbo, if for no reason than that the problem is so dire that they have no other choice.

“I believe it will have a clear majority,” alderman Ed Burke, chairman of the finance committee, told the Chicago Tribune of Emanuel’s budget. Burke, the longest serving alderman and a notorious machine boss with a war chest to rival the Daleys’, began his second stint as finance chair the same year the younger Daley took office in 1989, and has presided over fiscal matters in Chicago ever since. Perhaps this gives him the unique, if exquisitely ironic, authority to tell the Trib: “We’re at a point now where the city’s finances are in such serious condition that the city government simply can’t do business the way it has done business over the years.”

— Daniel Foster is news editor of National Review Online.