What’s really in the Wisconsin collective bargaining bill?

Fred Malek Founder and Chairman, Thayer Capital Partners
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On Friday, a Wisconsin judge issued a temporary restraining order to block Governor Walker’s recently passed collective bargaining bill. It is important to consider the merits of the bill and look at the protections that it provides to residents.

So what has Scott Walker really done in Wisconsin? Well, he has restricted, not ended, collective bargaining, which will protect taxpayers from having to subsidize way-over-the-market public employee benefit packages that have resulted from the past alliance of politicians and the unions that fund them. We have seen the damage these uncontrollable pension and benefit liabilities can do to states many years after they are adapted. Prime examples include Illinois and California, where huge unfunded liabilities have led to budgetary crises, threatened credit ratings, and increased interest rates on public debt. Walker also has brought public employee benefit packages into line with those of the rest of Wisconsin’s workers.

While the left attempts to portray the partial removal of public employee unions’ collective bargaining abilities as un-American, the simple fact is that residents entrusted the state with making the right decisions with their tax dollars. Yet for decades, Wisconsin and many other states have opted to give public employees pensions that would eventually spiral out of control and cause major fiscal disruptions to state governments. For example, Ohio’s unfunded liability could be as high as $166 billion, or 35% of Ohio’s gross state product.

Politicians approved these deals because they were literally playing with other people’s money, and they never contemplated the fiscal damage unfunded pensions could cause down the road. Now states across the nation are facing fiscal ruin because of these well-intended but fiscally reckless deals. Worse, some are calling for the federal government, which is facing its own ballooning deficit due to out-of-control spending on entitlement programs like Social Security and Medicare, to bail out these states.

Governor Walker has also taken away the Holy Grail for public employee unions — automatic union dues deductions. Public employees can now make their own decisions on whether or not to pay union dues. Walker is ultimately giving workers the ability to be pro-choice with their union dues and have a fair choice about their union. While this is great for public employees, this is terrible for union bosses.

Governor Scott Walker has shown leadership and courage through a rancorous time, having to deal with an ironic hijacking of the democratic progress by Wisconsin Democrats while fighting the union establishment, unsympathetic media and well-organized progressive groups. Governor Walker could have followed many other politicians down the road of subservience towards the unions and raised taxes to balance the budget. Instead, Scott Walker campaigned on fighting for Wisconsin residents who don’t have the luxury of a taxpayer-funded union machine. And because of his fight, he won, and so did we.

Fred Malek is Founder and Chairman of Thayer Capital Partners and the American Action Network.