Friday, February 25, 2011

You just knew there had to be something like this in the budget bill -- and it turns out that there is

Politicians love pension funds and other segregated funds like employee trust funds. They see them as piggy banks they can dip into when they get in a bind, saving them the hassle of raising taxes or cutting spending. That's the biggest reason a lot of states got into the binds they're in now. Politicians of both parties weakened the funds. Now the bill is coming due, and they either have to cut benefits or spend more and more of their limited operating budgets making up the shortfalls. Often the mess ends up in the courts, and they call the shots.

Wisconsin has been spared this trauma by a strong state constitution and by courts that upheld the constitution. Not that governors of both parties haven't tried. Tommy Thompson tried and was slapped down by the courts. James Doyle grabbed $200 million in segregated funds to fill a budget gap, but the courts said the money had to be put back.

So we've been in good shape. Until now. Sure enough, Scott Walker -- who campaigned against using segregated funds -- has a proposal to do just that in the budget repair bill the Assembly rammed through in the dark of night. The Capital Times found it on page 125.
Gov. Scott Walker has always dismissed the idea of using segregated funds to help balance the state budget.

But buried on page 125 of the budget repair bill is a proposal to take $28 million in reserves from the state's health insurance/pharmacy fund and spend it in the second half of this year.

The monies would be used to offset costs for providing health insurance for state employees from July 1, 2011 to Dec. 31, 2011.
$28 million isn't a lot. They probably thought they could just slip this through and set a precedent. Kind of a budgetary trial balloon. But if nobody questioned it, and if a compliant, conservative state Supreme Court agreed, they could open the floodgates later and start an all-out assault that would wreck Wisconsin's once proud and professional pension system.

Read today's Paul Krugman colum in the NYT. He compares Madison not to Cairo, but to Baghdad in 2003, when George Bush put a gang of inexperienced ideologues in charge and they wrecked the economy.
With looters still prowling the streets of Baghdad, L. Paul Bremer, the American viceroy, told a Washington Post reporter that one of his top priorities was to “corporatize and privatize state-owned enterprises” — Mr. Bremer’s words, not the reporter’s — and to “wean people from the idea the state supports everything.”

¶ The story of the privatization-obsessed Coalition Provisional Authority was the centerpiece of Naomi Klein’s best-selling book “The Shock Doctrine,” which argued that it was part of a broader pattern.
At first glance, comparing Madison to Baghdad may sound far-fetched. But the more we find out about what this gang has up their sleeve, it's not. The Shock Doctrine has come to Wisconsin. And if they can do it here, they can do it anywhere.

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