Stubborn Part Of War

October 10, 1990|By Ernest B. Furgurson

WASHINGTON — Washington.---THE HARDEST PART of the War Between the States was over 125 years and six months ago. The stubbornest part continues this moment, and seldom since 1865 have so many strains between regions, cities and counties, producing and consuming states appeared all at once.

They are economic, not social. No one of them is as traumatic as Reconstruction, or the civil-rights revolution of a generation ago. But together, they help explain why tax, budget, trade and environmental decisions are so hard to make in 1990 America.

Inevitably, political parties are trying to cash in on those differences even as they go through the motions of solving them.

The most glaring example of politicizing regional differences was the Republican proposal to cut the federal deficit by capping the income-tax deduction for state and local taxes. This was a blatant play to the Sunbelt states where growth is fastest and to which electoral college strength is shifting.

The high-tax states are mostly in the Northeast and Middle Atlantic -- states that provide more social services and have more urban problems, so must tax more. Part of their fiscal troubles came from the Sunbelt, with the northward exodus of black and poor white workers to better jobs, and later to more generous welfare programs. Most low-tax states are in the South. Two of the biggest, Texas and Florida, have no state income tax at all.

It may be coincidence that states that have gone Democratic in recent presidential elections, like New York and Massachusetts, would get hurt most, while major GOP strongholds would hardly be touched.

That's politics. So is the savings-and-loan scandal, though which party is most responsible will be debated forever. But there can be no debate over which regions are profiting from this disaster, and which must pay disproportionately to cover the losses.

Again, the Southwest will benefit -- because state regulators there were lax in overseeing thrift operations, so hundreds of their S&L institutions failed. A few days ago, 217 had been seized in Texas, 78 in California, 73 in Louisiana, and far fewer in the Northeast. But the bill, estimated at $2,000 per citizen and going up all the time, will be spread equally across the nation.

That's our federal system. But the insurance bill is not the only S&L inequity; in the government auction of seized assets, billions in Sunbelt real estate is being sold far below cost, and when the economy rebounds it will be resold for windfall profits.

Texas is on a roll. It can even gloat over Saddam Hussein's invasion of Kuwait, which has driven up oil prices, which is a boon to oil-producing states. The repeatedly suggested oil-import tax, meant to cut consumption and encourage domestic drilling, would help Texas but sock New England, which depends heavily on foreign heating oil.

Even within our federal system, some states are tempted to put up fences at the border. Thirteen of them got together last week to protest that they were being dumped on, literally, and they didn't like it. They are among the 17 where more toxic waste comes in than goes out.

This time, the rural, southern and western states are the complainants and industrial states are the main dumpers. The ''net importers,'' as they politely call themselves, are threatening to sue the Environmental Protection Agency to enforce its rules, insisting that all states ''share the pain.''

Fences would do nothing to cure the dumping of industrial waste from above, in the form of acid rain. Federal law would, if Washington and the competing states could agree. But the states that mine high-sulfur coal and the utilities and factories that burn it dispute the scientific evidence that makes them responsible.

The Reagan and Bush administrations have catered to those interests by insisting that more study is needed, and still more, until they are safely out of office. Yet again, the lakes, rivers and forests of the largely Democratic northeastern states are the main victims.

In the months before Appomattox, Yankee armies burned broad swaths of Georgia, Virginia and the Carolinas. The financial and environmental impact of today's civil wars may last longer than the depredations of William Tecumseh Sherman.

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