In 1909 Britain's prime minister, Herbert Asquith, and chancellor, David Lloyd George, presided over an extraordinary budget. It raised taxes on Britain's landed, wealthy elites, so as to provide a raft of social services, from pensions to unemployment benefits. In many ways, it laid the groundwork for the welfare state that emerged after the second world war.
One hundred and one years later, the People's Budget, as it came to be known, still has the power to amaze and to inspire. It was a piece of politics ahead of its time, brave in its identification of the pressing social problems of the age, willing to take on the rich and powerful in order to help society's most vulnerable. It was also one of the very few national budgetary strategies, in Britain or anywhere else for that matter, that acquired both its own name and its own distinct place in the popular consciousness. It is hardly an exaggeration to argue that in one fell swoop it catapulted Britain into an age of governmental modernity.
In the century following the People's Budget, social reformers in countries as diverse as Bangladesh, Namibia and Brazil have talked of "people's budgets" and participatory budget processes designed to recalibrate social priorities towards meeting the needs of the poor. It has become a slogan, a catchword epitomising the hope that governments can meet the profound needs of the moment.
Fast forward to 2010, and the emotive power of the name continues to resonate down the ages. Florida governor Charlie Crist, a Senate hopeful trying to find a new, independent constituency that might send him to the US Senate after his own Republican party's faithful ditched him for a Tea Partier, recently put forward a people's budget for his state. At a time of swingeing education cuts in many states, his budget tries to protect schools. It also doesn't go after public sector employees in the way many other state budgets are now doing. It's by no means a perfect budget, cutting children's protective services, law enforcement and community affairs budgets by large amounts, but compared with what's going on in so much of the country these days, it's at least somewhat rational, deliberative, in its approach to government services.
Meanwhile, in California, a coalition of civil rights groups and criminal justice system reformers, led by the San Francisco-based Ella Baker Centre, has begun touting its own people's budget, that, if ever passed, would push for wholesale reform of the state's huge criminal justice system as a way to save the state money and release funds to protect education and other vital elements of the social compact.
The coalition is calling for a public health, rather than an incarceration, strategy to deal with low-end drug crimes – converting all death penalty sentences to life without parole sentences and reforming the state's notorious three strikes law so that it only applies to violent crimes.
Since convicts on death row cost the state far more – in legal fees, in costs to maintain, and to guard, their separate living quarters, and in the endless appeals processes – than do lifers; since three strikes creates huge pools of increasingly elderly prisoners who tend, over time, to cost the state's department of corrections a fortune in medical costs; and since numerous studies have shown that imprisoning drug criminals is both more expensive and less effective than treating them, these proposals have the potential to be massive money savers.
Proponents claim they could save the state $12bn over five years. Whether that dollar amount is accurate or not, clearly there are significant savings that can be brought into play here. Given the ongoing budget crisis California faces, such a plan ought to be getting wide play. Conceivably, large numbers of politicians ought to want to associate themselves with the alternative budget and its commonsense recommendations.
But, politics not being a particularly brave game in California these days, the 2010 people's budget has a snowball's chance in hell of being passed. It is an economic and, by extension a philosophical, aspiration in search of its own Lloyd George. Most Democrats won't touch it for fear of appearing "soft on crime." Most Republicans won't touch it because philosophically they're quite comfortable with the state spending ever more on security apparatus and, at the same time, less on social programmes.
California is currently without a budget. If the governor has his way, the state's public sector employees will be paid minimum wage from this current pay cycle until the budget crisis is resolved. And, whether he has his way or not, the state has, for the third year in a row, a nearly $20bn hole in its financial heart.
The people's budget may not be an adequate fix, but it ought to at least be taken seriously and built upon by other reform-minded groups and individuals. As a concept, in this age of austerity budgets and anti-tax ideology, the people's budget is as evocative today as it was a century ago. Yes, done well, government can, indeed, serve the people. Done well, budgeting can indeed help rather than hurt the poor and vulnerable.
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