On October 28th, just days before the November general elections, I wrote about four gubernatorial candidates to watch as unconventional politicians. Those included New Mexico’s Susana Martinez, Nevada’s Brian Sandoval, Oregon’s Chris Dudley and Wisconsin’s Scott Walker. Dudley, a terrific man, lost, but hopefully he will be back to fight again. The other three candidates won and are already showing results. I wrote about how Scott Walker “demonstrated how to balance a budget consistently without raising taxes.” He is showing that right now as governor of Wisconsin.
This nation is facing frightening deficits and unfunded liabilities. Federal spending is double what it was ten years ago, and this year’s deficit is projected to be $1.6 trillion. States are facing an additional $130 billion of shortfalls this year, and almost all states have large unfunded pension and health care liabilities.
I’m thankful that governors like Scott Walker are showing us how to deal with this looming crisis.
Wisconsin itself is facing a $3.6 billion budget shortfall over the next two years and Governor Walker has proposed real solutions that would decrease the state’s structural deficit by 90 percent. As part of Walker’s plan to tackle Wisconsin’s looming budget crisis, he has made the courageous and crucial decision — like Chris Christie in New Jersey — to bring public employees’ benefits packages down to a level more comparable to those in the private sector.
Robert Costrell writes in The Wall Street Journal that Milwaukee teachers receive 74.2 cents on the dollar in health and retirement benefits. An employee in the private sector receives just 24.3 cents on the dollar. In some cases, teachers’ benefits packages are equal to half of their total employment packages. Costrell found that “the average Milwaukee public-school teacher salary is $56,500, but with benefits the total package is $100,005, according to the manager of financial planning for Milwaukee public schools.”
These gold-plated benefits packages exist because past politicians didn’t had the courage to stand up to unions and insist that benefits be tied to market realities. Quite simply, it was too easy to kick that political can down the road and let the next governor or the next generation of taxpayers deal with the mess. That is not only radically irresponsible; it is a recipe for our country’s ruin.
Charles Krauthammer writes in The Washington Post that “in the public sector, the politicians who approve any deal have none of their own money at stake. On the contrary, the more favorably they dispose of union demands, the more likely they are to be the beneficiary of union largess in the next election. It’s the perfect cozy setup.”
In light of this, Scott Walker has decided to tackle his state’s budget deficit not by raising taxes on hardworking Wisconsinites in the midst of an economic downturn but by making desperately needed changes to the state’s benefit and entitlement system. The rising cost of retirement packages and insurance has been identified as a threat to not only states like Wisconsin, but also to the United States as a whole.
I am pleased to say that the Republican Governors Association has wisely decided to support Scott. For years, the RGA has been a hotbed of ideas and action for practical, conservative governance. In an unprecedented step, after seeing millions of union dollars and thousands of outsiders pour into Wisconsin to fight Governor Walker’s good governance, the Republican Governors Association decided that it was time to show the country and the union bosses that we have Scott Walker’s back by launching an advertising campaign in support of his efforts on TV and online.
This is one of the most important fights of our time and it will impact the lives of Wisconsinites and Americans for generations to come. Our leaders must show courage and conviction to take on the tough fights and make the right decisions — and when they do, we must show them our strong and unwavering support.
Fred Malek is Founder and Chairman of Thayer Capital Partners and the American Action Network.