FRIEDMAN: A progressive in the age of austerity

I stopped by Chicago’s city hall recently to interview the mayor, Rahm Emanuel, the former White House chief of staff. I find “Rahmbo’s” Chicago agenda intriguing because it’s a microcosm of what the country will have to do for the next decade: find smart ways to invest in education and infrastructure to generate growth while cutting overall spending to balance the budget—with limited new taxes. It’s a progressive agenda on a Tea Party allowance.

Emanuel calls his philosophy “cut and invest.” The cuts are coming from long-padded city departments and are going to pay for more cops on the beat, longer school days and modernized subway stations—to create more incentives for companies to create jobs in Chicago.

In laying out his new budget recently, Emanuel summed up what it means to be a progressive in this age of austerity.

“The cost of putting political choices ahead of practical solutions has become too expensive,” the mayor declared. “It is destroying Chicago’s finances and threatening the city’s future.”

Emanuel’s pride and joy is the new mandate that he and his schools chief, Jean-Claude Brizard, pushed through for next year to have the school day for Chicago’s 400,000 students extended 90 minutes and the school year by about a week. The teachers’ union leadership has accepted that this will happen but wants more say on how to use the time—and more money. Parents are thrilled, but it will clearly require more talks with the union.

In 2003, the mayor added, “Chicago teachers got a double-digit pay raise and a shortened school week. The result was that politicians did not get a teachers’ strike and teachers did get better pay. But can anyone tell me what the kids got?”

Emanuel has also created a privately funded bonus pool for principals whose schools make exceptional progress.

It’s all part of one fabric, says the mayor: The better the schools and the safer the streets, the more people will flock to the city and the more businesses will want to locate here and create jobs.

On a good day, a firm like Accenture announces it is adding 500 jobs in Chicago. And, on a bad day, Emanuel notes, he finds himself “staring right into the whites of the eyes of the skills shortage. I had two young CEOs in the health care software business in the other day, sitting at this table. I asked them: ‘What can I do to help you?’ They said, ‘We have 50 job openings today, and we can’t find people.”’

Doug Oberhelman, the CEO of Caterpillar, which is based in Illinois, was quoted in Crain’s Chicago Business as saying: “We cannot find qualified hourly production people, and, for that matter, many technical, engineering service technicians, and even welders, and it is hurting our manufacturing base in the United States. The education system in the United States basically has failed them, and we have to retrain every person we hire.”

This is why Emanuel is trying to cut and invest everywhere. He expanded all-day kindergarten for 6,000 more kids by cutting $400 million out of the schools’ bureaucracy. He shifted 600 police from desk jobs to walking beats. To spruce up subway stations, he cut 200 positions out of his transportation department.

But besides cut and invest, Emanuel also has to raise revenue, without broadly raising taxes, to cover a $636 million operating deficit. He wants to charge hospitals and other not-for-profits for city water, impose a congestion surcharge of $2 for parking downtown and raise fees for drunken driving. Every source of revenue has to be tapped.

“We are at an inflection point as a city and as a country,” he said. “The American people know it in their bones.”

That’s why the issue for Chicago, and the nation, is the same: Can we cut enough fat to keep building enough muscle—while reforming taxes to raise more revenue—so we pay for the excesses of the last 20 years while financing the tools our kids and innovators need to thrive in the next 20? If so, we’ll have a hard decade, but can still have a good century. If not? Well, let’s just do it and not go there.•

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Friedman is a New York Times columnist. Send comments on this column to ibjedit@ibj.com.