The R word — recession — is back on the lips of economists again, both nationally and in Oregon. The prospect of a double-dip recession prompted Governor Kitzhaber to direct state agencies to look for another 10 percent to trim from their budgets.
Unless the economy suddenly turns on a dime, that means the 2012 legislative session may be staring at more spending cuts — not exactly what legislators want to focus on right before their re-election campaigns. It opens the door to political challengers who can criticize failed efforts by the state to stimulate job creation. The cuts also will evince political squeals.
First, the health care reform measure, House Bill 3650, passed in the 2011 session, calls for saving $240 million in low-income health care under Medicaid. Many observers believe this "savings" will amount to a just another cut.
Second, several state agency budgets passed by the 2011 session will be good essentially only for the first year of the biennium. In the case of the budget for to serve senior citizens and persons with disabilities, for instance, there is already not enough money to continue current services for 2012-13. Legislators could face the uncomfortable reality of having to cut programs for those who are the most dependent on state services.
There is a substantial disagreement in Salem over whether a state such as Oregon can pull itself out of the depths of a stubborn recession. No less a figure than Senate Minority Leader Ted Ferrioli, R-John Day, believes in the prospects of a "jobs agenda." There are always differing political views on what the agenda should look like, but with split control in the House and possibly in the Senate next February, there may be a greater willingness to take ideas from both sides of the aisle.