by Eric Martin
Ezra Klein offers an insightful summary of recent events in Wisconsin, including the fiscal decisions that gave impetus to the sizable protests taking place in that state over the past few days.
The short version is that Governor Scott Walker turned a projected budget surplus into a deficit by passing a series of tax cuts, as well as an unfunded health care bill (sound familiar?). Klein provides the details:
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 turned a surplus into a deficit. As Brian Beutler writes, "public workers are being asked to pick up the tab for this agenda."
Then, like any good Norquistian, Walker proceeded to use the budget crisis he created by tax cuts and unfunded programs to make structural changes and assail the constituencies of political foes:
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...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. [...]
If all Walker was doing was reforming public employee benefits, I'd have little problem with it. There's too much deferred compensation in public employee packages, and though the blame for that structure lies partially with the government officials and state residents who wanted to pay later for services now, it's true that situations change and unsustainable commitments require reforms. But that's not what Walker is doing. He's attacking the right to bargain collectively -- which is to say, he's attacking the very foundation of labor unions, and of worker power -- and using an economic crisis unions didn't cause, and a budget reversal that Walker himself helped create, to justify it.
The sleight of hand and misdirection are reminscent of many of the "solutions" being proferred in response to the inexplicably sudden attention that the deficit and debt are being shown in Washington.
Like Ezra, I'm of the opinion that certain pension features for public employees are in need of a tweak (especially in New York, where annual pension amounts can be gamed due to the piling on of overtime in the final year of employment, and then using that year's compensation level as the basis for the pension amount). In addition, there are arguments to be made (not that I agree) that public sector unions are anachronistic and no longer serve a useful purpose. However, Governor Walker is not making those arguments. At least, in the latter case, not without false pretenses.