As most Americans are now well aware, the confrontation in Wisconsin has become a “line in the sand” moment reverberating throughout the entire nation. The sides are clearly defined: Wisconsin’s public employee unions, the Democratic National Committee (DNC), Barack Obama’s Organizing for America, national labor leaders, and the president of the United States, versus Wisconsin Republicans, Tea Party activists, and taxpayers fed up with runaway government spending. Yet what Americans might not know is this: the animus Democrats and their allies are confronting has been substantially created by Democrats themselves: welcome to a “stimulus generated” confrontation.
The American Recovery and Reinvestment Act of 2009, aka the Stimulus Bill, was ostensibly supposed to fund “shovel-ready” jobs and keep unemployment at 8%. Since unemployment is at 9% officially (and close to 17% in reality), and president Obama himself admitted there was “no such thing as shovel ready projects” last October, one might be forgiven for wondering where a $787 billion package, which quickly increased to $862 billion in federal subsidies, ended up.
Where a substantial portion of it ended it up was in state coffers, where it was used to shore up budget shortfalls. “There’s no doubt that the stimulus has helped maintain state and local government employment…it was a lot of money for two years that was largely fiscal relief [to the states], meaning that they had some flexibility. If it hadn’t been for that, they would have been making major cuts,” said Donald Boyd, a senior fellow at The Nelson A. Rockefeller Institute of Government at the State University of New York at Albany. Now that the stimulus spending is decreasing, “[states] face really severe choices and clear voter sentiment largely against any tax increases. So that leads you to the spending side of the budget,” he added.
According to the Bureau of Labor Statistics, while private sector employees were bearing the brunt of the recession, government workers were largely spared: between June 2008 and June 2010, “the number of private-sector employees fell by six percent, but the number of state and local government workers declined by less than one percent.”
And that was only the first stimulus package. Last June, the then-Democratically-controlled Congress and the Obama administration ponied up an additional $50 billion of deficit spending in “emergency aid” (read: more stimulus) to state and local governments. They claimed the money was needed to avoid “massive layoffs of teachers, police and firefighters.” Republicans viewed it as nothing more than an attempt to “buy” the 2010 election. Regardless, it was a one-time payout and the money is gone.
Thus, reality has intruded. In Wisconsin, Republican Governor Scott Walker is faced with a $137 million budget shortfall for the current fiscal year, and a deficit of more than $3.6 billion over the next two. He has stepped into the breach with a plan that calls for Wisconsin state employees to contribute 5.8% of their salary to their own pensions, up from zero for most employees; a 6% increase to 12% for their own health care (the national average is 29%); the elimination of collective bargaining for such items as benefits and vacation time; the pegging of wage negotiations to the Consumer Price Index, raises exceeding which would have to be approved by a public referendum; eliminating currently-required union dues for state employees; requiring annual votes for unions to remain organized; and exempting police, firefighters and state patrol officers from collective bargaining limitations.
All of the above is accompanied by a promise not to lay off any workers. If the measure fails, up to 12,000 of the state’s 300,000 public sector employees could lose their jobs. “I don’t want a single person laid off in the public nor in the private sector and that’s why this is a much better alternative than losing jobs,” Governor Walker told “Fox News Sunday.”
The changes resonate with a majority of the Wisconsin electorate. Walker and Republican legislative candidates ran on a platform of fiscal austerity in the 2010 election, and in a state where Democrats controlled both houses of the legislature and the governorship, voters handed all three to Republicans–by substantial margins. For the first three days, demonstrations had been dominated by angry public sector employees, giving many Americans the (media-fueled) impression that this was a one-sided fight. On Saturday, however, thousands of pro-bill Tea Party protesters showed up. Many held signs saying they couldn’t get there earlier because, unlike the state workers who had abandoned their job obligations to protest, they were working.