Mohamed Hosni Mubarak Walker is to blame for Wisconsin's budget, not unions
Let's be clear: Whatever fiscal problems Wisconsin is -- or is not -- facing at the moment, they're not caused by labor unions. That's also true for New Jersey, for Ohio and for the other states. There was no sharp rise in collective bargaining in 2006 and 2007, no major reforms of the country's labor laws, no dramatic change in how unions organize. And yet, state budgets collapsed. Revenues plummeted. Taxes had to go up, and spending had to go down, all across the country.Walker has said, along with some other recently elected right-wing nuts, they are going to create jobs. Now that's funny. Mohamed Hosni Mubarak Walker job creator,
Blame the banks. Blame global capital flows. Blame lax regulation of Wall Street. Blame home buyers, or home sellers. But don't blame the unions. Not for this recession.
Of course, the fact that public-employee pensions didn't cause a meltdown at Lehman Brothers doesn't mean they're not stressing state budgets, and that the pensions they've been promised don't exceed what state budgets seem able to bear. But the buildup of global capital that overheated the American housing sector and got packaged into seemingly riskless financial products that then brought down Wall Street, paralyzing the economy, throwing millions out of work, and destroying the revenues from state income and sales taxes even as state residents needed more social services? The answer to that is not to end collective bargaining for (some) public employees. A plus B plus C does not equal what Gov. Scott Walker is attempting in Wisconsin.
In fact, it particularly doesn't work for what Walker is attempting in Wisconsin. The Badger State was actually in pretty good shape. It was supposed to end this budget cycle with about $120 million in the bank. Instead, it's facing a deficit. Why? I'll let the state's official fiscal scorekeeper explain (pdf):
More than half of the lower estimate ($117.2 million) is due to the impact of Special Session Senate Bill 2 (health savings accounts), Assembly Bill 3 (tax deductions/credits for relocated businesses), and Assembly Bill 7 (tax exclusion for new employees).
In English: The governor called a special session of the legislature and signed two business tax breaks and a conservative health-care policy experiment that lowers overall tax revenues (among other things). The new legislation was not offset, and it helped turn a surplus into a deficit [see update at end of post]. As Brian Beutler writes, "public workers are being asked to pick up the tab for this agenda."
But even that's not the full story here. Public employees aren't being asked to make a one-time payment into the state's coffers. Rather, Walker is proposing to sharply curtail their right to bargain collectively. A cyclical downturn that isn't their fault, plus an unexpected reversal in Wisconsin's budget picture that wasn't their doing, is being used to permanently end their ability to sit across the table from their employer and negotiate what their health insurance should look like.
That's how you keep a crisis from going to waste: You take a complicated problem that requires the apparent need for bold action and use it to achieve a longtime ideological objective. In this case, permanently weakening public-employee unions, a group much-loathed by Republicans in general and by the Republican legislators who have to battle them in elections in particular. And note that not all public-employee unions are covered by Walker's proposal: the more conservative public-safety unions -- notably police and firefighters, many of whom endorsed Walker -- are exempt.
*The budget report is working with two time periods simultaneously: 2010-2011, and then 2011-13. The $130 million deficit now projected for 2011 isn't the fault of the tax breaks passed during Walker's special session, though his special session created about $120 million in deficit spending between 2011 and 2013 -- and perhaps more than that, if his policies are extended. That is to say, the deficit spending he created in his special session is about equal to the deficit Wisconsin faces this year, but it's not technically correct to say that Walker created 2011's deficit. Rather, he added $120 million to the 2011-2013 deficits, and perhaps more in the years after that.
The Department of Health Services last month signed a new contract with Deloitte Consulting for more maintenance and enhancement of the information system for SeniorCare and other income maintenance programs.Why do Republicans hate America and American workers.
According to the public inspection copy of Deloitte’s technical proposal, the new, eight-year contract (known as CARES) increases the hourly billing rate from $92 to $104 and increases the fixed facilities rate from $1,320,000 to $2,040,000 a year. When multiplied by the 300,000 billable hours that DHS estimates will be available, this contract’s total annual cost is tens of millions of dollars.
DHS could scale back this contract by hiring information technology professionals and doing much of this work in-house for less money. That’s what the Department of Workforce Development did several years ago when they took over maintenance of the portions of the CARES system which deal with the W-2 and Child Care programs.
Why is DHS preparing to spend over $30 million a year on one information system when times are so tough? It won’t create jobs for Wisconsin residents since most of Deloitte’s workforce is subcontracted from India.
Maybe when Scott Walker promised during his gubernatorial campaign that he’d create 250,000 jobs, perhaps what he really meant was those jobs would be in India, not Wisconsin.
