Deficit and debt
freethoughts | Thursday, March 10, 2011
In the past few weeks, coverage of the ongoing labor dispute between Gov. Scott Walker of Wisconsin and the state’s public sector employee unions has dominated the headlines and editorial sections of newspapers, talk shows and websites throughout the country. At issue in this contentious debate is the right of Wisconsin’s state workers to collectively bargain for wages and benefits.
Gov. Walker, backed by Republican majorities in both houses of the state legislature, has proposed eliminating this right and is asking state workers to contribute a greater percentage of the health and pension benefits. On the other hand, Democrats and union members, while accepting the increased contribution requirements, have vehemently opposed the effort to strip state workers of their collective bargaining rights. They have staged massive overnight demonstrations in the state capitol building and even, in the case of the Democratic members of the state senate, fled to Illinois to deny the legislature the ability to vote on the proposed bill. Republicans argue that collective bargaining for public sector employees is an inherently flawed policy — they contest that, while private sector unions are acceptable because they seek to bargain for a greater share of the profits of their own labor, public sector workers create no profits, and so are merely trying to grab an ever larger slice of taxpayer dollars (ironically, a position shared by the great liberal icon Franklin Delano Roosevelt). Democrats see Gov. Walker’s bill as merely the opening skirmish in a strategic war to whittle away the rights of all workers, public and private, to unionize.
In spite of these conflicting viewpoints, the real driving force behind this debate is not a philosophical divide over the role of public sector unions, but rather the need to confront the stark reality that Wisconsin faces a massive budget deficit that voters have made clear they want to see addressed. Gov. Walker reasons that eliminating the collective bargaining rights of state workers will make it more difficult for them to obtain future pension and benefit deals like the ones that contributed to the state’s present fiscal crisis, thus helping to stabilize the long term finances of Wisconsin.
In searching for creative solutions to solve his state’s budget problems, Walker is joined by his counterparts in statehouses across the nation, from New York to California, Illinois to Texas, who all face similarly desperate fiscal situations as they witness the recession’s continuing negative impact on tax revenues. Many of these governors should be commended for trying to responsibly trim down the size of state government by cutting wasteful spending. Others have taken a far more severe and harmful approach to reducing deficits, and are endangering the future of the children of their states.
Texas, a state that already ranks 49th in SAT verbal scores and 46th in SAT math scores, recently saw its governor, Rick Perry, propose to cut $2 billion more from his education budget. A similar slash-and-burn mentality has taken hold on Capitol Hill, where enthusiastic new Republican legislators in the House of Representatives have sought to enact tens of billions of dollars of spending cuts, to such worthy programs as food safety inspection, Pell grants, food stamps and foreign aid.
Efforts like these and those playing out in state capitals across the country aren’t addressing the true underlying causes of this nation’s fiscal crisis, because they focus solely on cutting non-defense, non-mandatory discretionary spending, which constitutes only about 19 percent of the federal budget (and a moderately higher share of state spending, but mostly because of the lack of defense spending in states). What’s more, they are consuming valuable political capital that ought to be expended fighting for reform of that spending which is truly driving up the deficit — entitlements and defense spending. In 2010, entitlement spending constituted 55 percent of the federal budget, and nearly 45 percent of many state budgets. These numbers are expected to grow significantly, as more aging baby boomers become eligible for social security and Medicare, and as a result of the 2009 health care law which expanded Medicaid eligibility to 133 percent of the poverty line, beginning in 2014. Spending of this magnitude is entirely unsustainable, and Congress and state governments must be willing to take unpopular action in order to restore a sense of balance to these bloated disbursements.
Everything has to be on the table when it comes to solving this predicament, including raising the retirement age, instituting means-based testing, and reducing the cost of living adjustment. Similarly, when it comes to defense spending, it is time for the United States to listen to reason. Currently, U.S. defense expenditures account for 40 percent of total global military expenditures, six times more than the next largest budget, that of the People’s Republic of China.
Do we really need to be spending $10 billion on ballistic missile defenses that in 20 years haven’t ever worked once? How about $2 billion dollars annually for a fanciful space laser program? Do we really need to maintain military bases in Germany or Portugal? Surely it is a sad reflection on the state of our nation when government is willing to cut education spending before programs like these.
Our nation faces a massive fiscal crisis that is going to affect our nation’s economy for years to come. Our leaders in federal and state government are going to have to make many tough choices about how and where to best allocate spending. Instead of wasting valuable time and energy fighting battles over collective bargaining and education spending, they should be focused on fixing those programs that are true driving forces behind the deficit. Let’s hope they can acknowledge this fact and begin working to restore some common sense to our spending habits.
Ryan Williams is a sophomore. He can be reached at [email protected]
The views expressed in this column are those of the author and not
necessarily those of The Observer.