Guest Opinion by Mike Konczal
Tim Fernholz wrote an excellent article in the National Journal about the "bait and switch" of Governor Walker's Wisconsin plan. Fernholz points out that the short-term deficit problem can be covered by debt restructuring, and that the big pieces of the bill that relate to dismantling public sector unions, control over Medicaid and creating a no-bid energy asset sale process are not directly budget related. (See Bait and Switch?).
There's a three-prong approach in Governor Walker's plan that highlights a blueprint for conservative governorship after the 2010 election. The first is breaking public sector unions and public sector workers generally. The second is streamlining benefits away from legislative authority, especially for health care and in fighting the Health Care Reform Act. The third is the selling of public assets to private interests under firesale and crony capitalist situations.
This wasn't clear to me at first. I thought this was about a narrow disagreement over teacher's unions. Depending on what you read, you may have only seen a few of these parts, and you may have not seen them put together as a coherent whole. This will be the framework that other conservative governors, and even a few Democratic ones, will use in their state, so it is good to get a working model in place. In order to frame where it stands now, I'm going to chart this and give a set of descriptions and must-read links:
Defund and Delegitimize Public Workers
You wouldn't know this from the popular narrative, but, as Zach Carter found, Wisconsin's public pensions are among the nation's healthiest. (See Wisconsin's Pension Fund Among Nation's Healthiest). Carter walks you through the numbers from people like the nonpartisan Pew Center for the States, which found Wisconsin to be a "national leader in managing its long-term liabilities for both pension and retiree health care."
There are many things, like removing unions' ability to collect dues or requiring annual votes, that aren't budgetary or service driven at all but are simply mechanisms for bleeding the union dry. (See What is actually being proposed in Wisconsin?).
What I found most interesting about the 20-minute phone call between Governor Walker and a prankster claiming to be David Koch is this:
WALKER: ...That's all they wanna talk is what are you doing to help in the governor in Wisconsin. Next I talked to Kasich every day, you know John's got to stand firm in Ohio. I think we can do the same thing with Rick Scott in Florida, I think Snyder if he got a little more support could probably do that in Michigan. We start going down the list, you know, there's a lot of us new governors that got elected to do something, big.
KOCH: You're the first domino.
WALKER: Yep. This is our moment... I had all my cabinet over to the residence for dinner. Talked about what we were going to do, how we were going to do it, we had already kind of doped plans up, but it was kind of a last hurrah, before we dropped the bomb and I stood up and I pulled out a, a picture of Ronald Reagan and I said you know this may seem a little melodramatic but ...when he fired the air traffic controllers and uh I said to me that moment was more important than just for labor relations and or even the federal budget, that was the first crack in the Berlin Wall and the fall of Communism because from that point forward the soviets and the communists knew that Ronald Reagan wasn't a pushover...
Firing the air traffic controllers brought down the Soviet Union? When the true believers get together and talk openly, they don't talk about this being about the budget, or getting innovative school practices in place, or whatever. It's about showing their enemies that they mean business and aren't pushovers. He believes that by smashing one you can smash them all. And he believes he is the first domino to move.
Other states won't need unions to fight. Notice Providence, Rhode Island firing all of their teachers, to selectively rehire them later. This is how ground out our elites want to see the labor contract. (See Providence plans to pink slip all teachers).
Cutting Government Services
From the CBPP: "[Walker's] bill would strip the legislature of practically all of its authority to set the guidelines for the program (known as BadgerCare), leaving the power to do so almost solely in the governor's hands." (See Little-Known Piece of Wisconsin Budget Bill Has Huge Consequences for Medicaid).
Shawn Doherty has covered this for the Cap Times, as well as Jonathan Cohn, David Wahlberg of the Madison State Journal, AnnieJo at DailyKos and Amanda Terkel of Huffington Post.
This is the most important thing that has gotten the least coverage.
The administration of Medicaid would be moved away from the state legislation to be more directly under the control of the Governor's office. People may be dropped right away and there could be extreme games of chicken with the Federal government over medicaid spending.
The Wisconsin Department of Health Services is currently being run by Heritage Senior Fellow Dennis Smith, who has been making his right-wing think tanker bones arguing that states should drop out of Medicaid, the long-time dream of the extreme right. (See Medicaid looms as next big budget battle). It is telling that "Smith wouldn't discuss Medicaid provisions in the upcoming budget bill" even though it's all he's been writing about for years.
Specifically, one of the last things he wrote had this talking point: "Congress and the Administration have enacted a sweeping overhaul of one-sixth of the American economy, dramatically expanding the scope of federal power. ... When governors and state legislators realize that they have been reduced to mere agents of and tax collectors for the federal government, bipartisan opposition from the states will be inevitable."
This power grab by the Governor will be the beachhead for slashing medicaid rolls to record lows and planning the conservative opposition against health care reform more broadly. The people who elected the Governor deserve more information about what his ultimate goals are.
Privatizing Assets, Privatizing Everything
Ed from ginandtacos.com caught the language related to no-bid energy asset sales in Walker's bill. (See Stand and Deliver). Both Felix Salmon and Yves Smith have followed up on how this will be a new normal for states over the next two years, where more and more government infrastructure is going to be sold into a crony favor-and-campaign-contribution trading environment. (See Wisconsin's Walker Joins Government Asset Giveaway Club (and is Rahm Soon to Follow?)).
Matt Taibbi's new book has a chapter on this topic that is really good. (See America for Sale: An Exclusive Excerpt from Matt Taibbi's New Book on the Economic Meltdown). This is going to be much more relevant over the next two years, and we should learn about how it works and what the consequences are early on.
Notice that each of these objectives overlap with each other. Privatizing services cuts public workers out while crony deals, skimming and poor services creates distrust in the government, leading to a negative feedback loop.
States will have to deal with their budgets. There are costs coming down the road. But the important thing to understand is that the new wave of governance at the state level isn't about handling these problems — it's about changing what the government does in a more reactionary and polarized way. Squeezing regular people to provide benefits will maintain and expand our high levels of inequality. Its about making struggling parties weaker and strong parties richer.
Making it almost impossible to raise taxes later is irresponsible and dangerous, but it accelerates this plan. (See Wisconsin governor signs bill to make tax rise tougher). They hoped to handle this all behind closed doors — sadly for them, and lucky for the public, activism and the internet are shining a large spotlight on their actions.
To read the full piece with all the links, check it out here.