I attended the National Governors' Association in Washington this past weekend, an occasion for a gathering of 29 new governors. It was clear the economy was on their mind as well as the fiscal crisis hitting their respective states. Some officials of the Administration made some well appreciated interventions. But it was clear that a significant number owed their election to the Tea Party movement and were carefully watching events being played out in Wisconsin as the showdown between Governor Scott Walker and a contingent of public service unions was about to enter a new stage of confrontation (Governor Walker wasn't attending the conference).
The battle lines over public sector wages and benefits are being drawn in the state of Wisconsin and there is every indication the outcome will be messy. At issue is how government employees affect public finances. Governor Walker not only wishes to tackle this issue, but has gone a step further in wanting to permanently change how the state will conduct collective bargaining in the future.
Unions see this as a full frontal attack on the labour movement. The fact 36 per cent of union members work in the public sector, while only 7 per cent work in the private sector has made this an easy Republican versus Democratic battle about the role and size of government.
Democrats and labour argue that Republican governors are misinterpreting their electoral victories and using ideology to attack unions and the middle class. The GOP counters that deficits and the debt are the biggest threats to America’s future. These state showdowns foreshadow what will happen at the federal level when Congress will be asked to raise the debt ceiling this spring.
For the GOP, the mantra is cuts to taxes and spending, while the Democrats are looking at a mixture of cuts and tax reforms to increase revenues. Both parties know that entitlements such as Medicare, Medicaid, and Social Security will have to be tackled for real deficit cutting. And lest we forget defense spending. Obama and the newly emboldened Republican caucus know this, but no one wants to go first and spell out the cuts.
Meanwhile, governors like New Jersey’s Chris Christie and, to a lesser degree, Mitch Daniels of Indiana and John Kasich of Ohio are sounding the alarm and making headway in the polls for their blunt talk and results-oriented policies. It is clear that if Wisconsin’s governor gets his way, spending cuts will rise to the top of the agenda. The problem is the math involved and whether compromise is anywhere to be found.
When Ronald Reagan worked out a compromise on Social Security with Tip O’Neill, there was give and take. Bill Clinton eliminated the deficit with a mixture of cuts and tax hikes with some bipartisanship. It is the only way the numbers eventually balance.
Polls indicate voters want their political leaders to solve problems rather than engage in the ideologically inspired partisanship we are seeing in Wisconsin. But there is every reason to expect more of the confrontation and polarization we are seeing in Wisconsin before good sense prevails.