COLUMN RIGHT / TOM BETHELL : This Time, Wilson Wasn’t Bushwhacked : He got a presentable budget by refusing to be panicked into a tax-boosting consensus.

How many times have we heard the cry of “crisis” in recent weeks, describing the prolonged budget negotiations between Gov. Pete Wilson and the Democratic legislators? There never was a crisis, however. There was no expectation on the part of financial markets that the state’s bills would not soon be paid. If there had been any such expectation, the price of the state’s bonds would have fallen, but this did not happen.

“The market for California bonds has remained constant with respect to the national market over the last few months,” said Gregory Harrington, vice president and director of trading and research at Franklin Funds, managers of the dominant California municipal-bond fund. Harrington also said that he was “puzzled” by the headlined claims that the failure to produce a budget more promptly would end up costing taxpayers an additional $200 million. This was nothing more than an unsubstantiated guess that the lengthy negotiations in Sacramento would cause interest rates to rise.

It seems clear that the talk of crisis was calculated to pressure the governor into a hasty capitulation, thereby restoring budgeting-as-usual: in this instance, spending increases and a deficit heaped onto next year’s budget. Wilson would then almost certainly have been forced to accept a tax increase next year, and his political fate would have been sealed. Since the legislators face an election this fall and Wilson does not, time was on his side, and the Democrats evidently felt that they had to do something to deflect him from his more resolute course.

There has been talk of “drastic cuts,” programs “gutted” and “austere” measures, but we should always be skeptical when these words appear in headlines. It is in Wilson’s own political interest to appear to have held firm against the big spenders, remember, and to have emerged victorious in the struggle. For this reason, the numbers should be double-checked:

The governor’s office released figures showing the first year-to-year decline in the budget’s general fund in more than 50 years. Expenditures, $43 billion last year, are projected to be $40.8 billion this year. Not bad for Sacramento, you might say. But what about the overall budget total? For the coming year it will be $57.4 billion. Conspicuously missing from the package of information sent out by Wilson’s office was last year’s budget total: $55.7 billion. So there will actually be a small overall increase in state spending this year. And despite the rhetoric, the education lobby has continued to prosper, with a 4.5% spending increase for public schools and community colleges.

On balance, though, Wilson deserves credit for holding the line to the extent that he did. There is no general tax increase. User fees will go up--Californians will pay a little more for the privilege of going to college--and this surely is the just way to finance such state activities. There have also been real reductions in some programs. Welfare grants will be cut by 5%, and disbursements to local jurisdictions will be reduced. In percentage terms, these reductions are small, but we have to start somewhere in establishing that government programs cannot expand indefinitely.

In his dealings with the Legislature this year, Wilson has begun to show the determination and purpose that has been lacking in the White House’s parallel negotiations with Congress. Last year, Wilson made the mistake of meeting Assembly Speaker Willie Brown halfway, agreeing in his opening move to eliminate half of the state deficit by raising taxes. Wilson was outwitted, but he seems to have learned an important lesson.

Government today has devolved into a contest of wills between those who represent tax recipients and those who represent taxpayers. It can only be restrained by a chief executive working determinedly on behalf of the latter. By contrast, President Bush still seems to imagine that good government involves consensus, not contest. He’s in a fight but doesn’t know it, which is why he is now in danger of losing the election.

Wilson seems to have learned that consensus entails defeat. If he persists in this course, he should more than recapture the support of those who elected him in 1990. Taxpayers outnumber recipients, after all, and many long for a leader unafraid of the superficial unpopularity that comes from standing firm: saying no to the spending lobbies and the comfortably salaried brigades of educators and bureaucrats. These are capable of generating an immense uproar of indignation and an illusion of crisis where none exists. But by firmness, they can be contained. That quality is now becoming evident in Pete Wilson.