The Washington Post reports today that “the daunting tower of national, state and local debt in the United States will reach a level this year unmatched just after World War II and already exceeds the size of the entire economy, according to government estimates.” But there are a number of big differences between our national debt now and the debt in 1946. The Post reports: “State and municipal governments from Sacramento to Madison to Harrisburg have racked up about $2.4 trillion in debt, or more than 15 percent of GDP.”
And even this total is understating the problem. Recent studies show that state and local governments are severely underestimating their pension and benefit promises, including a $574 billion shortfall for the nation’s top major cities and a possible $3.4 trillion shortfall for the states. The cause of these crippling pension and benefit obligations is no secret. The Post explains: “Public employees often enjoy more generous pension and health-care benefits, and these are at the root of the long-term budget problems confronting many states.”
How did this happen? Why did so many state and local governments not only spend too much today but promise future spending far beyond the means of taxpayers to pay for it? Government unions. And across the country, legislators and governors are beginning to fight back.
The professional left (including the AFL-CIO, the SEIU, the Reverend Jesse Jackson, the NEA, AFSCME and President Barack Obama) is trying to portray these budget battles as an assault against all unions. But as Wisconsin Governor Scott Walker (R), who is pushing legislation to curtail government union bargaining power, explained last night, this is just plain false:
The bill I put forward isn’t aimed at state workers, and it certainly isn’t a battle with unions. If it was, we would have eliminated collective bargaining entirely or we would have gone after the private-sector unions. But, we did not because they are our partners in economic development. We need them to help us put 250,000 people to work in the private sector over the next four years.
Walker is right: Government unions are inherently different from private-sector unions. The purpose of private-sector unions is to get workers a larger share of the profits they helped create. But government is a monopoly and earns no profits. All government unions do is redistribute more tax dollars from taxpayers to unions. The left used to understand this. Not only did President Franklin Delano Roosevelt write in 1937: “All government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service,” but as recently as 1959, the AFL-CIO Executive Council stated that “government workers have no right [to collectively bargain] beyond the authority to petition Congress—a right available to every citizen.”
Ohio Governor John Kasich (R) also recognizes the key difference between private-sector and government unions, telling the Associated Press Monday:
We have an $8 billion budget hole in Ohio. We have a third of our college students that leave Ohio after three years. We’ve lost 600,000 jobs in the last 10 years. Only California and Michigan have lost more than that. And part of the reason why we are pushing collective bargaining is we frankly want to give the managers in our local communities and our schools the ability to control their costs so they don’t have to raise taxes and drive businesses out and more jobs out.
By granting government workers the power to collectively bargain, government unions have completely politicized the civil service. State and local employees in 28 states are required to pay full union dues or get fired. Using this government coercion, government unions have amassed tremendous financial resources that they use to campaign for higher taxes and higher pay for government workers. The top outside spender in the last election was the American Federation of State and County Municipal Employees ($91 million). Governor Mitch Daniels (R–IN), who signed an executive order ending state worker collective bargaining his first month in office, spoke in support of Walker yesterday:
The people who are doing the demonstrating, and their allies … spent that state broke. … The most powerful special interests in America today are the government unions. They’re the leading financial contributors. They have muscle, a lot of times their contracts provide for time off to go politick and lobby.
And lobby and politick government unions have. Across the country, from Arizona to California to Minnesota to Maine to New Jersey and more, government unions have pushed legislation and ballot measures that raise taxes and spending. In Trenton, New Jersey, last night, Governor Chris Christie (R) framed the debate:
In Wisconsin and Ohio, they have decided there can no longer be two classes of citizens: one that receives the rich health and pension benefits, and the rest who are left to pay for them. These ideas are not red or blue. They are the black and white of truth.
Conservative governors across the nation should absolutely work to reform the way public-sector unions drain our economy. As Governor Christie told MSNBC’s ‘Morning Joe’ today: “We’re not trying to break the unions, the unions are trying to break the middle class.”
Quick Hits:
- The unrest that has spread from Tunisia to Libya pushed oil prices to a two-year high.
- Real estate prices slid in just about every part of the country in December, pushing the housing market to its lowest level since the crash began.
- Having fallen behind in funding its state pensions, Illinois is seeking to raise $3.7 billion through a bond issue this week.
- The Wisconsin Department of Regulation and Licensing is investigating complaints about doctors who handed out fraudulent medical excuses for pro-union protesters.
- The Wisconsin Senate has passed a rule change that will withhold direct-deposit paychecks from absent lawmakers, forcing them to show up in person to collect their salary.
