In the Mirror


Wisconsin Deals Fiscal Responsibility a Winning Hand

Blog From
June 6th, 2012

The much-anticipated vote has finally been tallied. Scott Walker is the first governor in U.S. history to withstand a recall attempt. Actually, only three gubernatorial recalls have been mounted in the nation’s history. Still, winning is better than losing. Just ask the two who were expelled, California Governor Gray Davis, ousted in 2003, and North Dakota Governor Lynn Frazier, sent packing in 1921. Frazier may be beyond querying but Davis can tell you that it’s no fun. Other than that, what are the implications of Walker’s survival?

It should be noted at the outset that Walker did more than merely survive yesterday’s attempted unseating. His survival was, in today’s vernacular, a blowout smackdown. The recall’s margin of defeat was almost twice Walker’s victory margin when he won the gubernatorial election in 2010 against the same opponent.

Democrats, stinging over the recall failure, are desperately trying to put a happy face on Walker’s continuing presence in the Executive Residence.  Most are claiming that the failure is the result of voter recall fatigue and the impropriety of using the recall process under these circumstances. Some are also attributing the defeat to out of state money. In other words, it had nothing to do with (a) fiscal responsibility, (b) anti union sentiment or (c) Election 2012. Regarding the latter, recall supporters point to the fact that Obama was favored over Romney in exit poll interviews conducted early on Tuesday.

The Dems are right on the third claim. But, it has nothing to do with the fact that Obama enjoyed a 9-percentage point preference over Romney in early exit poll interviews. When the interviews were conducted, the recall outcome was too close to call. But, by the end of the night, Walker had handily rebuffed those who would reject him. This means that those interviewed were not among the voters who gave Walker his margin of victory. No one knows who those folks will favor in the presidential election.

Even so, contrary to the prognostications of Karl Rove and other political pundits, the recall results have nothing to do with partisan politics. The issue was narrowly drawn and it has consumed, and changed, Wisconsin residents over the past year. It’s difficult to imagine that, in such a climate, the result can be anything other than narrow as well. The message that Wisconsin voters sent on Tuesday should not, therefore, encourage the GOP about the fall election. In saying no to Walker’s ouster, Wisconsin voters simply said yes to fiscal responsibility. And to a recognition of the role that public sector unions play in unsustainable deficits.

The media spotlight leading up to the vote largely ignored the fiscal issues, preferring to focus on the more glamorous union-busting angle. But, banning collective bargaining for most public sector unions was not a direct assault on them. They were the foreordained casualty of slaying Wisconsin’s fiscal dragon. And the Badger State is hardly alone in the effort to ward off the yawning debt that flows from collective bargaining negotiations. On Tuesday, voters in two of California’s largest cities voted overwhelmingly to reduce public employee pensions.

The largest direct financial threat posed by public unions today is massive unfunded pension liability, which faces too many states. According to the Pew Center on the States, at least 18 of the Federated Fifty each face liabilities greater than $10 billion. California and Illinois lead the liability parade with an excess of $50 billion a piece. When retiree healthcare costs are included, the unfunded liabilities of these states total $1 trillion.

Unless this liability is reduced, government spending priorities must necessarily change. As pensions are funded, the amount of money available for services such as schools, roads and welfare will be dramatically reduced. States will eventually end up serving only retired employees since their post-retirement obligations are difficult to void, even in bankruptcy. This isn’t what taxpayers have in mind on tax day.

The cost of pensions and benefits, as high as they are, is only part of the picture. In fact, the indirect costs may be even higher. According to a National Affairs treatise, the public union price tag includes reduced government efficiency and responsiveness due to union-imposed rules and regulations. Sweetheart agreements entered into by their predecessors also hamstring newly elected, fiscally responsible officials.

The unseemliness of public employees holding sway over public services caused Franklin Roosevelt and George Meany to renounce the idea of public unions. Today’s fiscal predicament shows that those gentlemen were more right than they could have imagined.

In an exit poll interview, one Wisconsinite who voted for the recall said she did so because she was tired of the bickering. One wonders how tired she would become if her state government could only afford to service union debt.

See you in the mirror.

Posted in In the Mirror