Most states have balanced budget requirements. However, states are “running out of other people’s money,” as Margaret Thatcher once quipped. States are suffering from severe budget shortfalls and many are teetering on the verge of bankruptcy or default. Painful budget cuts are on their way and everyone, even state workers, will have to pay.
The Wisconsin capitol has resembled the streets of Egypt in recent days. Teachers’ unions have orchestrated mass protests over the budget repair plan of the newly elected Republican governor, Scott Walker. Democratic lawmakers have fled their duties of voting on the new measures by leaving the state. State troopers were dispatched to search for the missing legislative members, but no one is clear on what authorities are actually empowered to do.
The protests and upheaval were spurred by the proposed budget measures including limits on collective bargaining power of unions. Part of attempting to correct a $3.6 billion shortfall includes asking state workers to contribute to their pension and health insurance plans. Currently, state employees in Wisconsin do not contribute to their pension plans at all. Health insurance payments would be increased from 6 percent to 12 percent.
State Sen. Alberta Darling (R) stated:
They’re not going to lose their sick leave agreements or their vacations, or all those things they hold dear. Those things will not change, but we are broke, we have to do things differently. Labor costs are 50% of our state operations.
Local police, fire and state patrol are exempted from the changes.
These measures will bring the benefits of state workers closer to those of the private sector workforce. They will also help avoid layoffs thus preserving jobs. However, protesters are castigating Gov. Walker as the “Mubarak of the Midwest” and comparing his proposals to Hitler’s abolishment of unions. Thousands of protesters encircled the state capitol and blocked the entrance when it was time for a legislative vote.
Teamsters Local 695 sent a letter to Assembly Republicans denouncing the bill and calling for the representatives to vote against it.
“Your party, the Republican Party, will forge its name into the annals of American Politics as the anti-freedom party. Hitler should be so proud. He burnt books while you burn rights,” the letter said. “When you vote think of the children left behind and the families potentially harmed.”
There is obviously great difficulty in comprehending that the majority of states, like Wisconsin, are simply broke. The source for funding government jobs is the private sector, where the pain and suffering due to unemployment has been felt for over two years now. Even teachers whose jobs have been held sacrosanct are now at risk and require adjustments to the new reality of a lagging economy.
Even Elmo and Big Bird are likely to be subject to the merit pay structure of the private sector. President Obama’s new budget includes $451 million for the Corporation for Public Broadcasting. The new Congress may eliminate all funding for public broadcasting. If the value of PBS and NPR’s programming can endure in a free market economy, we will not have to bid adieu to childhood favorites like Sesame Street and Caillou. It is likely that PBS could survive on corporate and private funding.
NPR is quite another story too involved to elucidate here. But demonstrating value and worth that can flourish in the free market is necessary when you run out of other people’s money.
Video clip of protest of Gov. Walker’s Budget Repair Plan
Obama comments on Wisconsin: