Can Governor Scott Walker Cure Politicians From Overspending?

Last week, Wisconsin Governor Scott Walker fired the shot heard ’round the world by signing a bill that limited the rights of most municipal and state employees to engage in collective bargaining. The bill does exempt public safety employees, including police officers, fire fighters, deputy sheriffs, state probation and parole officers, and persons that provide combined police and fire protection services, from the restrictions mandated by the bill. Interestingly, I did not spot an exemption for correctional workers.

While the Great Recession had many fathers (and mothers), I don’t believe that public sector unions were one of them. Nevertheless, when the government needs to ratchet down its expenses to match its diminished revenues, government workers stand out as an obvious target (and solution). Admittedly, when times are good, unions have no impetus to offer concessions of any kind. So, if Wisconsin or other states intend to rebalance its books on the back of public employees, now is the time when the unions recognize that they have to bear part of the burden as well.

However, you have to wonder about the Governor’s thought process. Instead of negotiating directly with the unions to seek a mutually acceptable range of concessions, the Governor poisons the atmosphere and pushes through a law to limit what the unions may demand. To me, this law really is an indictment of the politicians. Instead of just avoiding bad contracts, politicians decided that they needed to protect us from themselves by passing a law to limit their ability to enter into bad contracts.

I liken this latest round of political theatre to the 1990s comedy known as the Balanced Budget Act where the politicians could not stop overspending without first passing a law to bar overspending. However, even with the Balanced Budget Act, Congress still could not curb the deficit. That may be the same fate that awaits Wisconsin, even if Governor Walker is able to stifle the public sector unions.

So, while the Governor has won this initial skirmish, the eventual outcome of this new law may take decades to manifest as the fervor for fiscal conservatism eventually wanes. Whenever the next boom cycle ramps up and state coffers are again flush with cash, this bill will be but a distant memory as politicians on both sides of the aisle rush to spend their new bounty under the assumption that the good times will never end. And when the dark days return, the politicians will have to find someone else to blame.