Carey steered New York out of economic crisis

NEW YORK — Former New York Gov. Hugh Carey was at his best when faced with a crisis and when he took office in 1975, New York City wobbled at the edge of fiscal calamity.

The governor had inherited the worst economic climate since the Great Depression. New York City, the nation’s Wall Street

-powered economic engine, was nearing bankruptcy. Famously declaring the “days of wine and roses are over,” the well-to-do son of an entrepreneur rose to the challenge, forced major changes in the way New York governed and financed itself, and stared down a Republican president to keep New York City

from insolvency.

The liberal Democrat who reversed the tax-and-spend excesses of his Republican predecessor to keep the city and state afloat died Sunday at his summer home on Shelter Island. He was 92.

For years after he left office, political friends and foes alike paid annual tribute to the charismatic, at times unpredictable governor. On Sunday, they looked wistfully back at a man they deemed a true statesman, an example of the sort of nonpartisan leader needed today, particularly given the current economic woes and political paralysis in Washington.

“As our nation faces fiscal crisis, we are reminded of the proud example set by Gov. Carey that with sober, enlightened leadership, government can help solve even the most difficult problems,” former Gov. George Pataki, a Republican, said in a statement. “His lasting legacy, saving the city of New York from bankruptcy, is an important lesson for our elected officials in Washington today and for all Americans.”

The Brooklyn-born Carey served two terms as governor from 1975 to 1982 after seven terms as a congressman representing his home borough.

“This government will begin today the painful, difficult, imperative process of learning to live within its means,” Carey declared in his inaugural address on Jan. 1, 1975.

His predecessor, Republican Nelson A. Rockefeller, had run up much higher taxes and enormous debt as he built a legacy of state universities and highways while in New York City, Mayor John Lindsay, a Republican turned Democrat, followed a similar spending pattern that led to deep deficits in the 1974-75 recession.

With New York City at the brink of bankruptcy and threatening to take the state down with it, Carey took drastic action, seizing control of the city’s finances, engineering more than $1 billion in state loans to bail out the city and mustering the backing needed to reorganize its shaky finances and restore confidence in both the city and state.

Shuttling among Albany, New York City and Washington, he then won federal loan guarantees from the reluctant Republican administration of President Gerald Ford that secured the plan.

Ford’s hesitancy made front-page news, immortalized in the New York Daily News headline: “Ford To City: Drop Dead.” While Ford did not explicitly mouth those words, they were implied in a speech he made initially denying the city federal assistance.

Gov. Andrew Cuomo, who announced Carey’s death, called him a “true American success story.”

“Declaring that the days of wine and roses were over, Governor Carey looked to statesmanship and compromise, rather than partisanship or parochialism, to get the state’s fiscal house in order,” Cuomo said in a statement. “He called for shared sacrifice and asked all New Yorkers to come together. New Yorkers across the state heard the governor’s call to action, followed his lead, and the ship was righted.”

He campaigned successfully for appointment, rather than election, of judges to the state’s highest court, a move that was seen as insulating the Court of Appeals from politics. He helped bring the Democratic National Convention to Madison Square Garden in 1976 and 1980 and sought to again stamp New York as a singular American destination, launching the iconic and still-imitated “I Love New York” promotional campaign.

His accomplishments were sometimes overshadowed by gaffes, however, such as an offer to drink a glass of toxic PCBs to downplay contamination of a state office building, or an attempt to use the state to block construction next to his summer home.

He was also regarded as something of a loner, who had difficulty maintaining relationships with subordinates and legislators. His first lieutenant governor, Mary Anne Krupsak, ran against him for the party nod in 1978, a rare public slap at the boss.

Outside politics, Carey frequently found his personal life in the headlines, especially after his whirlwind romance and 1981 marriage to millionaire Evangeline Gouletas. Carey’s new bride had said she was twice married and her first husband had died; the truth was she had been married three times and all her exes were still alive. Carey and Gouletas divorced in 1989.

Even his hair drew comments in the press: After his marriage to Gouletas, he dyed it often in shades that never quite looked natural or even the same.

As governor, Carey pushed for job programs, increases in welfare and unemployment benefits, and began a major tax cut program in 1977.

A staunch Roman Catholic, Carey personally opposed abortion but nonetheless led the fight for Medicaid funding so poor women wouldn’t be denied access to abortions. Years later, he voiced regret over that role.

He opposed capital punishment and six times vetoed bills restoring the death penalty.

“I would like to be remembered as somebody who cared a great deal about people,” Carey said.

His second term bogged down in disputes with the Legislature and seemed lackluster.

“What am I supposed to do, save New York City twice?” Carey once commented. He declined to seek a third term. He became a partner in a Park Avenue law firm then joined W.R. Grace & Co. as a Washington lobbyist.

Before he became governor, Carey spent 14 years in Congress representing his Brooklyn district. Now-Sen. Charles Schumer took up his seat when Carey left.

“He steered the ship of this state away from fiscal calamity and toward brighter days of responsible budgeting and forward-thinking policy decisions, rooted in the common good and not in special interests or partisan politics,” Schumer said in a prepared statement Sunday. “Hugh Carey created a legacy that few other New Yorker can claim.”

In 2008, Carey endorsed Barack Obama over New York Sen. Hillary Rodham Clinton for the Democratic presidential nomination.

“Either choice would be a measurable improvement over where we are,” Carey said, “but I have a preference based on the measures I make: a basic capacity to deal with crisis and to think globally for our security, the fact that he (Obama) has talked of coalition and reaching across the aisle, and the way he has conducted his campaign.”

Hugh Leo Carey was born in Brooklyn in 1919. He left St. John’s College in 1939 to enlist in a National Guard horseback cavalry unit at Camp Drum in northern New York. He fought in the infantry with the 104th Division in France, Belgium, the Netherlands and Germany, and was a decorated lieutenant colonel when he was discharged in 1946.

After military service he went to law school and then joined the family business; his father was a petroleum distributor. In his first run for Congress, in 1960, he wrested a seat from a four-term Republican incumbent.

He served on the Ways and Means and the Education and Labor committees, and in 1969 made an unsuccessful run for the New York City Council presidency.

Carey and his first wife, Helen, had 14 children. Two sons died in a car accident in 1969 and Helen, who had suffered from cancer, died in 1974. Less than three weeks later, he announced his candidacy for governor.

Carey, who also maintained a residence on Manhattan’s Upper East Side, was a senior partner at Harris Beach law firm.

Asked in a 2007 New York Times interview what he would like to be remembered for, Carey replied: “as a man who loved the people of New York as much as he loved his own family.”

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Esch reported from Albany.