James Pethokoukis

Politics and policy from inside Washington

Scott Walker, America’s Thatcher

Mar 10, 2011 01:57 UTC

“Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there is doubt, may we bring faith. And where there is despair, may we bring hope.” — Margaret Thatcher, May 4, 1979.

Reducing the power of government unions has several major benefits: 1) It will begin to make it easier to rework pension and healthcare obligations; 2) it will begin to make it easier to restructure government so that it is more efficient and less expensive; 3) it will begin to end a system where a major political party often acts as a wholly owned subsidiary of a special interest; and 4) it will begin help save the U.S. education system where teachers unions are preventing children from being taught by competent teachers.

The very good news from Wisconsin:

Republicans in the Wisconsin state Senate passed the most controversial portions of Governor Scott Walker’s budget repair bill late on Wednesday, stripping out the sections that required the presence of their 14 absent Democratic colleagues in the upper chamber.

In an 18-to-1 vote, the Senate approved the curbs on collective bargaining by public employees that Walker has insisted are needed to help the state’s cash-strapped municipalities deal with a projected $1.27 billion drop in state aid over the next two years. The measure will now go to the Assembly, expected to vote on the matter on Thursday.

COMMENT

Mr. Walker recognizes that government employeee unions are different than private unions and should never have been allowed. Private unions adre limited by what the fruits of their labors can produce – get to much and your company goes bankrupt and the employees are out of a job. The government will never go bankrupt as it has the power to print money and raise taxes. Thus you can collectively bargain benefits way out of proportion to anything that your actual labor produces. I feel sorry for the individual employees who may loose some of their bargaining priveledges, but the free ride on the taxpayers has got to end.

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Scott Walker chops away at Democrat foundation

Feb 25, 2011 17:27 UTC

National Journal’s Reid Wilson paints a great picture of Scott Walker’s threat to government unions and the Democratic Party:

Consider how crucial unions are to the Democratic coalition. As Republican-allied groups like American Crossroads and the American Action Network poured millions into television advertising, the single-largest outside actor in the 2010 elections was the American Federation of State, County, and Municipal Employees.

AFSCME spent $87.5 million on the 2010 elections, an amount the Wall Street Journal calculated as about 30 percent of all spending for Democrats by outside groups. The Service Employees International Union and the National Education Association combined to spend another $84 million for Democrats, more than even the U.S. Chamber of Commerce spent during the midterms.

All three unions represent millions of the public-sector employees who are at risk of losing collective-bargaining rights in states like Wisconsin, Indiana, and Ohio. And all three, along with the rest of Big Labor, are spending big money on lobbying and public relations campaigns to defeat those legislative proposals.

If unions fail to stop the GOP assault, Republican victories would represent a major chink in the Democratic armor. A loss of some collective-bargaining rights means a speedier decline in membership. In turn, that means fewer dues-paying members to fund political activities in 2012 and beyond.

But Republicans don’t even need to win every legislative battle to sap union resources. The battles themselves can suck up money that might otherwise go to turnout operations for Democratic candidates.

Andy Stern can now fix a problem he helped cause

Apr 13, 2010 15:10 UTC

Multiple reports suggest Andy Stern will be leaving his job as head of the politically powerful SEIU. The union, which represents healthcare and public employees, was instrumental in passing healthcare reform. In other words, he has contributed in two ways to America’s fiscal woes. First, health reform may prove a budget fiasco since its tax hikes and spending cuts  were used to expand coverage rather than cut the budget deficit. Second,  fat pay and benefit packages for public sector unions are a big reason so many states like California have long-term fiscal woes. As this David Feddoso story found:

Among states whose government workers are less than 40 percent unionized, median per capita state debt is $2,238. Among states with between 40 and 60 percent of their government workers in public sector unions, the average debt is $3,609. Among states with more than 60 percent of the government workforce unionized, the average (median) per capita debt is $6,380.

Interestingly, Stern will be a member of Obama’s deficit commission. So there are at least a couple of issues that need addressing that he will be an expert on.

Iraq debt almost as safe as California’s

Mar 24, 2010 17:20 UTC

Wow (from the Boston Globe):

Iraq is now considered a safer bet than Argentina, Venezuela, Pakistan, and Dubai — and is nearly on par with the State of California, according to Bloomberg statistics on credit default swaps, which are considered a raw indicator of default risk.

“Compared to California, I’d rather bet on Iraq,’’ Daher said. “Iraq is a country where there are still bombs going off and people getting murdered, but they are less indebted than the United States. California is likely to have more demands on its resources, and there is no miracle where California is going to have more revenue coming out of the sky. Iraq has prospects for tremendously higher revenues, if they can manage to get their act halfway together, which they seem to be doing.’’

The crushing cost of the public sector

Mar 24, 2010 16:38 UTC

Great post with oodles of charts from Mike Mandel. I did want to highlight one chart, though:

benefit chart

A storm is coming

Mar 8, 2010 17:00 UTC

Looks like British civil servants are striking over budget plans to cap severance pay (via Clusterstock). A sign of things to come in the United States, where tight government budgets are going to force spending cuts and layoffs. The dissatisfaction over American education plays into this, too. The political impact of this will be fascinating since the public employee unions may be the most important Democratic interest group.

Obama picks a great battle

Mar 8, 2010 16:26 UTC

As welfare was for Bill Clinton, education could be for Barack Obama — an issue that shows independence from his liberal base and allows for compromise with Republicans. Obama’s decision to support the authorities at the poorly performing Rhode Island school that fired its entire faculty has enraged teachers unions, as this NYTimes story documents. But it is hard to argue with the president’s reasoning: “If a school continues to fail its students year after year after year, if it doesn’t show signs of improvement, then there’s got to be a sense of accountability.”

Also on the education front, please read this NYTimes mag story on how to improve America’s teachers. You will be amazed at how little effort goes into instructing teachers on how to manage their classrooms or how to specifically teach various subjects. If these skills were improved, one expert concluded, “we could close the gap between the United States and Japan on these international tests within two years.”

Losing patience with public sector workers and unions

Mar 5, 2010 21:08 UTC

This USA Today story has the kind of numbers that stick with people:

Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist in both government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available. These salary figures do not include the value of health, pension and other benefits, which averaged $40,785 per federal employee in 2008 vs. $9,882 per private worker, according to the Bureau of Economic Analysis.

Me: It’s the benefits that really stand out. There have been more and more stories out there about the fat union benefits of government workers, both federal and state. New Jersey Governor Chris Christie has been railing on this issue since he was elected last year. Here is a bit from a recent speech that got lots of play in the blogosphere:

Our citizens are already the most overtaxed in America. U.S. mayors hear it all the time. You know that the public appetite for ever-increasing taxes has reached an end. So when we freeze $475 million in school aid, I am hearing the reverberations from school boards saying now you are just going to force us to raise taxes. Well there is a 4 percent cap in place as you all know, yet school boards continue to give out raises which exceed that cap, just on salary. Not to mention the fact that most of them get no contribution towards the spiraling increase in health care benefits.

There is also this from USA Today:

The percentage of federal civil servants making more than $100,000 a year jumped from 14 percent to 19 percent during the first year and a half of the recession. At the beginning of the downturn, the Transportation Department had one person making $170,000 or more a year; now it has 1,690 making that.

And this from the LA Weekly:

In the past decade, Los Angeles Unified School District officials spent $3.5 million trying to fire just seven of the district’s 33,000 teachers for poor classroom performance

COMMENT

The Government has long known that monopolies distort market economics they just don’t include unions as monopolies.

And I don’t believe the earlier comment that higher taxes on the 1000 top earners would balance the budget. We are talking about $500 billion and up. They don’t average that much for their entire net worth.

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