Friday, August 20, 2010
WHERE IS TODAY’S HUGH CAREY?
The governor was a model of leadership in terrible fiscal times
By ROB POLNER
An editorial in a leading New York City daily called him “A Governor for Hard Winters.” And the description was apt, largely because, 35 years ago, Hugh Carey braved a fiscal crisis that proved more severe than any the nation had seen.
In the midst of troubling economic times, it’s a legacy we must honor and appreciate.
From his first year in office, Carey was consumed by New York City’s monumental budget woes. Years of excessive short-term borrowing by the city government had obscured dismal budget management. The house of cards collapsed when, in the spring, the big commercial banks stopped buying and selling city notes for fear of a default.
Leadership rescued New York.
In the tense months that followed, Carey, a former congressman, masterfully coaxed $6.9 billion in U.S. Treasury loans for the beleaguered metropolis from a decidedly recalcitrant Congress and President Gerald Ford (who was brought around only after the Daily News’ immortal giant headline, “FORD TO CITY: DROP DEAD”).
What set Carey apart when the city and state needed him so badly? He had tremendous credibility — and the integrity to wield it effectively.
Military service. While some politicians inflate a kernel of achievement into an exaggerated resume, Carey saw extensive combat in World War II. He was among the first soldiers who crossed the Ramagen Bridge leading into Germany’s interior under Hitler’s counteroffensive, and participated in the liberation of the ghastly forced-labor camp in the Nazi-fortified town of Nordhausen. He carried the emotions of such searing experiences with him throughout his years.
Political experience. Though hailing from the powerful Brooklyn Democratic clubhouse, Carey established his political autonomy early on. His unique approach was epitomized by his role in shaping the Elementary and Secondary Education Act of 1965, which provided the first significant federal funding for schools, both public and parochial. Though his voting record was liberal, Carey made sure that the views of his conservative constituents and his personal values were embodied in the final bill.
Business roots. Carey grew up in an entrepreneurial family, worked for his older brother’s oil company and, a decade after his election to Congress, gained a seat on the tax-writing House Ways and Means Committee in 1970. As a governor, Carey showed an ease in dealing with business leaders that was rare in politics, especially for a Democrat.
Best and brightest. Confident in his abilities, Carey sought the smartest, most knowledgeable and most unencumbered people he could, flouting traditional patronage rules. His choices made all the difference when the city crisis hit.
Tough choices. The single most important Carey quality was a willingness to face down a problem with difficult decisions, not political sleight of hand.
He convinced unions to defer salary increases and to invest billions of dollars from their pension funds in risky state-issued bonds. He required banks to accept a moratorium on repayment of $1.6 billion in notes. He forced the city to slash 60,000 jobs, raised taxes and introduced tuition at the City University, while shifting permanently, to the state budget, the city’s costs for local courts and four-year public colleges.
When the immediate threat of bankruptcy had eased, Carey slowed the growth of Medicaid and pushed through a reduced pension tier for new city and state employees, resulting in billions of dollars in savings in the years since. He proceeded to initiate the largest personal income tax rate cut in the state’s history.
Today, at a time when New York State government is broadly viewed as dysfunctional, more leaders ought to emulate Carey’s path of risk and effectiveness.
Polner is the co-author (with Seymour Lachman) of “The Man Who Saved New York: Hugh Carey and the Great Fiscal Crisis of 1975.”
