Wisconsin’s Financial Crisis Caused By Scott Walker
There seems to be a lot of misunderstanding about the cause of the problems in Wisconsin. The new governor, Scott Walker, is proposing a new budget to close a budget gap. In the proposed legislation he’s proposing big cuts to state workers salaries, but he’s also trying to remove all bargaining rights from the unions. Now it turns out that this fiscal crisis is brand new, he actually inherited a surplus:
The reality is radically different. Unlike true austerity measures — service rollbacks, furloughs, and other temporary measures that cause pain but save money — rolling back worker’s bargaining rights by itself saves almost nothing on its own. But Walker’s doing it anyhow, to knock down a barrier and allow him to cut state employee benefits immediately.
Furthermore, this broadside comes less than a month after the state’s fiscal bureau — the Wisconsin equivalent of the Congressional Budget Office — concluded that Wisconsin isn’t even in need of austerity measures, and could conclude the fiscal year with a surplus. In fact, they say that the current budget shortfall is a direct result of tax cut policies Walker enacted in his first days in office.
“Walker was not forced into a budget repair bill by circumstances beyond he control,” says Jack Norman, research director at the Institute for Wisconsin Future — a public interest think tank. “He wanted a budget repair bill and forced it by pushing through tax cuts… so he could rush through these other changes.”
In less than 2 months, Walker has turned a $120M surplus into a $140M deficit. You can guess why there’s a looming deficit right? Of course you can – it’s tax cuts.
You can read the fiscal bureaus report here (PDF). It holds that “more than half” of the new shortfall comes from three of Walker’s initiatives:
$25 million for an economic development fund for job creation, which still holds $73 million because of anemic job growth.
$48 million for private health savings accounts — a perennial Republican favorite.
$67 million for a tax incentive plan that benefits employers, but at levels too low to spur hiring.
Ezra Klein has a really good explanation of what’s happening. Doesn’t this sound a lot like the Shock Doctrine proposed by Naomi Klein?
In other words, this is a manufactured crisis, one caused by tax cuts that probably mostly benefited the rich. In my version of a just society, it would be illegal for elected officials to enact policies and legislation that constitute a probable substantial risk of social harm.
UI, I thought exactly the same thing. This sounds exactly like the shock doctrine in action.
According to TPM:
To the extent that there is an imbalance — Walker claims there is a $137 million deficit — it is not because of a drop in revenues or increases in the cost of state employee contracts, benefits or pensions. It is because Walker and his allies pushed through $140 million in new spending for special-interest groups in January.
More than half of the new shortfall comes from three of Walker’s initiatives:
*$25 million for an economic development fund for job creation, which still holds $73 million because of anemic job growth.
*$48 million for private health savings accounts — a perennial Republican favorite.
*$67 million for a tax incentive plan that benefits employers, but at levels too low to spur hiring.
In essence, public workers are being asked to pick up the tab for this agenda.
http://tpmdc.talkingpointsmemo.com/2011/02/wisconsin-gov-walker-ginned-up-budget-shortfall-to-undercut-worker-rights.php?ref=fpc#
“In than 2 months, Walker has turned a $120M surplus into a $140M deficit.”. That makes him the odds on favorite to win the George Bush Fiscal Conservative award at the next Republican National convention.
Public sector unions were never really authorized by the Federal government. However, progressive legislators, in the 1930s and beyond, used it to push their agenda.
Here’s an interesting letter from Franklin D. Roosevelt to a public union from the ’30s:
“All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations. The employer is the whole people, who speak by means of laws enacted by their representatives in Congress. Accordingly, administrative officials and employees alike are governed and guided, and in many instances restricted, by laws which establish policies, procedures, or rules in personnel matters.”
Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees. Upon employees in the Federal service rests the obligation to serve the whole people, whose interests and welfare require orderliness and continuity in the conduct of Government activities. This obligation is paramount. Since their own services have to do with the functioning of the Government, a strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable. It is, therefore, with a feeling of gratification that I have noted in the constitution of the National Federation of Federal Employees the provision that “under no circumstances shall this Federation engage in or support strikes against the United States Government.”
The statement by Roosevelt is so broad and undefined as to be practically meaningless. Besides, public unions have engaged in collective bargaining with state and federal governments within the law for decades.
Walker’s re-ordering of the state’s finances is utterly despicable, but seems Constitutional. Unconventional opposition is the only route left.
Elections have consequences, and sometimes the morons win. I wish I could see it some other way.
What difference does it make that Roosevelt (whose major political opposition came from the opponents of government hiring for projects like the WPA & CCC) expressed concern about Federal employees having unions? They promised us the Social Security card wouldn’t be used for ID, either, try THAT when you deal with the DMV. But it’s irrelevant. Walker isn’t in the federal government, is he?
Totally weird, what issues seem to be “state’s rights” and what aren’t.
Walker, Rove, Christie, Kascich etal have been planning this strategy for some time. They all got money from the Koch Brothers, Freedom Works, and Roves crossroads. If they can bust the unions in this country, they have a free ride in 2012. I don’t hear the pundits talking about how much money the right wing put into the last election, but they are already talking about 2 billion to run for President in 2012. There is no way the citizens or unions could raise enough money to fund our candidates. This is part of the ultra right wing strategy. Planned Parenthood, abortion rights, unions, colletive barganing on the table…but no a peep about jobs?
Read Daily Kos on this…see the connection to Walmart.
JournOlist creator Ezra Klein gets it wrong – Again! Not only does he lack credibility because of his pro-Obama media cabal meme, he oversimplifies a complicated budget deficit projection in Wisconsin to fuel a baseless story.
Here, Salon.com explains why. Heck, even common sense explains that one cannot reconcile a $3.6 billion shortfall for fiscal 2013 with a measley $121 million deficit for 2011. He just took office 6 weeks ago.
http://www.salon.com/news/budget_showdown/index.html?story=/tech/htww/2011/02/18/wisconsins_budget_woes_are_real
Only wingnuts dispute the fact that Walker’s tax cuts make a bad fiscal situation worse. That is because ignoring uncomfortable facts and living in a trickle down fantasy world is a vital skill to have for anyone who chooses a life of wingnutdom.
Fortunately for wingnuts, there is a multi-billion dollar media/entertianment industry devoted to keeping them from having their minds troubled by reality.
The references aren’t from Ezra Klein. Anyway, I’m not a mathematician but Scott made $140M in tax giveaways to his buddies (in 6 weeks) and then announces a budget deficit of $140M. Hmmmmm….. Ezra Klein did something with Journolist so that means math has been repealed.
Caused by Scott Walker? You’re idiots, as usual:
Meanwhile, what about Maddow’s claim — also repeated across the liberal blogosphere — that Walker’s tax-cut bills approved in January are responsible for the $137 million deficit?
Lang’s fiscal bureau report and news accounts addressed that issue as well.
The tax cuts will cost the state a projected $140 million in tax revenue — but not until the next two-year budget, from July 2011 to June 2013. The cuts are not even in effect yet, so they cannot be part of the current problem.
http://www.politifact.com/wisconsin/statements/2011/feb/18/rachel-maddow/rachel-maddow-says-wisconsin-track-have-budget-sur/
There is no “current problem.” The “$3.6 billion deficit” is nothing but next cycle’s budget requests, which amount to a 9.7% increase over current spending. But in the last budget cycle, with similar increases requested, actual spending was cut by about 2%. The difference between those figures comes to — you guessed it — about $3.6 billion. It’s a fictional crisis.
Yes it is a fictional crisis as Geezer points out, and one that was drawn up by Koch-backed groups like Americans for Prosperity, the Cato Institute, the Competitive Enterprise Institute, and the Reason Foundation.
The Mother Jones article makes it plain to anyone who is interested in the facts; the millions that the Koch brothers have invested has been used to build a very antagonistic atmosphere toward public-sector unions.
Republican or Democrat, I don’t know how you can call yourself American and cheer as these guys undermine our democratic system. Furthermore, who doubts that this isn’t happening in Delaware?
What’s happening in Delaware?
How about 100 Unionized “chicken catchers” for Perdue losing their jobs and being replaced by a North Carolina based non-union lower-paying contractor. This is the tone that is being set in Wisconsin, Ohio, New Jersey and Delaware. Unionized working people barely able to exist with the wages they are currently paid asked to sacrifice portions of their spendable income to co-pays and fees for Health Care Insurance so that these Insurance Companies and their Pharmaceutical brothers in greed can pry the last buck from the fingers of hungry and cold, hardworking families. This race to the bottom for working men and women is offensive and cruel and a sign of a morally bankrupt culture of greed. Where is the press conference decrying Perdue’s profiteering by our political or union leaders? Where is the outrage and what does it take to provoke any kind of public outcry. I would settle for acknowledgment that this type of mining new depths is even happening.
God bless the State workers and their allies in Wisconsin and don’t mistake that foul smell of insatiable greed for winds of change.
John Kowalko
I work in your factory.
I study in your schools.
I fill your penitentiaries.
And your military too!
And I feel the future trembling,
As the word is passed around.
“If you stand up for what you do believe,
Be prepared to be shot down.”
And I feel like a stranger
In the land where I was born
And I live just like an outlaw.
And I’m always on the run.
And though you may be stronger now, my time will come around.
You keep adding to my numbers, and you shoot my people down.
More lyrics: http://www.lyricsfreak.com/q/quicksilver+messenger+service/#share
More lyrics: http://www.lyricsfreak.com/q/quicksilver+messenger+service/#share
The first thing Reagan did was to break the unions. At the time there was a case to be made that it was essential to tamp down wage inflation to stop commodity inflation. After all, Republicans had tried price controls and it didn’t work (duh), so wages were the next thing to try.
So if breaking the unions reduces the inflation rate, what happens if you break the unions when inflation is already low?
Our self appointed job creators think they will benefit by breaking the unions. Instead they will be shitting their own bed. If they think union wages are onerous, wait until they see what deflation brings.
What happened to those who went into teaching because they liked working with kids? Then they ask for School Bonding for Computers for the Children, but the Computers never show up. The money goes to the teachers. The Parents Rightfully Get Steamed Up. You Reap What You Sow!