The most important battle in America is now taking place in Wisconsin. If you want to see the real difference between Republicans and Democrats then come to the Midwest. This is where the fiscal front lines are clearly drawn. A decade of big spending programs has crippled Wisconsin, Illinois and Michigan. The only industry growing in these states is government.
The major reason the fiscal situation is so out of control in the Midwest is because of pension payments for public sector union employees. Practically all of their tax money is needed to address the pension fund crisis which has been apparent for a long time.
Lawmakers in the past ignored the problem and continued to borrow money to pay for current pension obligations. Unlike the federal government, a state can not create new money to pay its bills.
In Wisconsin a new GOP Governor and legislature are trying to say no. They do not want to repeat the mistakes of Illinois and Michigan. They tried to pass a reform plan in the State Senate yesterday which would finally address the explosion in pensions and other spending related to public employees.
The vote did not happen because Democratic lawmakers crossed the border and hid in Illinois. They were able to deny the GOP a quorum, and their plan is to have labor and liberals win the battle in the court of public opinion.
They only need one more vote to win in the State Senate. Governor Scott Walker’s (R-WI) campaign last year was focused on opposition to additional public employee spending, and the huge burdens it has created.
The Governor does not want Wisconsin to share the fate of its neighbors who ignored the mounting debt and focused on various liberal crusades.
Michigan was the only state to lose population and it also lost one million jobs. Illinois is losing two seats in the House of Representatives, and half a million people have abandoned Chicago. Both Illinois and Michigan enacted the largest income tax increases in state history, but Walker’s no new tax vow is adamant. The message from the Midwest reflects a clear choice for our nation.
ILLINOIS: Democrats control the legislature and the Governor’s Mansion. The state has surpassed California and is now the worst credit risk in America. Its public debt is in excess of $130 billion. They have not balanced a budget in a decade and the state debt is close to junk grade. For the past decade they have been spending $3 for every $2 they take in. In response to the fiscal crisis they caused, liberals offered their usual solutions:
- Democrats increased state income taxes by 67 percent and business taxes by 46 percent. All Democrats voted yes, and all Republicans in both the House and Senate last month voted no.
- Illinois now has the highest effective corporate tax rate in the industrialized world.
- Prior to the vote Illinois ranked 48th in job creation.
- They also approved $4 billion in new borrowing, and they are now trying to borrow another $11 billion. The legislature did not cut the budget, they just hiked taxes. Republicans said the enormous increases would drive businesses out of the state. Sen. Kyle McCarter (R) said the best investment now “is in moving vans. . . They are bankrupting the state with this increase.”
- A liberal Democrat was elected Governor in November and Illinois is the heartland of Blue America. They sent Barack Obama to the U.S. Senate with 70% of the vote in 2004 and returned the Democratic Whip, Dick Durbin, with a thundering 68% in 2008. Obama won another statewide landslide that year.
MICHIGAN: Until last month, Gov. Jennifer Granholm (D) was in office for the past eight years. She now has the highest negative rating in state history and is moving to Berkeley, California to teach at a law school. With good reason, Granholm says she is through with politics forever.
- When she took office unemployment was 4.8% under her GOP predecessor, and when she left six weeks ago it was 13.1%.
- Michigan now has 20% more government employees than manufacturing jobs.
- Michigan enacted a 22% tax increase on gross business receipts. Republicans were solidly in opposition, and now all of their predictions have come true. The tax increases didn’t come close to raising the revenue Democrats promised. In fact, this year Michigan will have 33% less revenue.
- Many Michigan businesses closed down or left the state.
- Among all states, Michigan now ranks last in economic growth, first in unemployment, and third for high business taxes. It ranks 49th in retaining young adults.
WISCONSIN: The state is facing a $3.3 billion deficit in the next two years, but labor has declared a full-scale war over the reform proposals. The main GOP target is reining in bloated public employee union pay and benefits.
Teachers have closed schools for the past two days by leaving their jobs to attend protest rallies. It is uncertain if schools will be closed on Friday.
It is an illegal strike, and teachers are putting their benefits ahead of education. Many teachers with tenure make over $100,000, and they have exceedingly generous benefits. They also work only 9-months a year.
Democrats will not allow a vote on Governor Walker’s proposal. He says it is essential because the state has a huge deficit and has lost over 150,000 jobs in the past two years. The Governor believes economic growth will not return unless the fiscal crisis is addressed.
Democrats had 35,000 protesters at the state capitol yesterday, and they remained in the capitol building last night. What is the plan the liberals find so outrageous?
- Almost every public employee would have to contribute 5.8 percent toward their pension. They currently make no contribution to their own pension.
- The state workers would also have pay 12.6 percent of their health insurance premiums. This would be an increase from the current 6 percent.
- This would still have them paying $100 less a month than their private sector counterparts.
- Future raises would be limited to the inflation rate unless a bigger increase was approved in a referendum. The non-law enforcement unions would lose their rights to bargain over anything but wages.
- Public sector workers are already protected against unfairness by civil service laws, and Governor Walker has supported expanding these guarantees.
- The alternative being promoted by State Senate Democrats would involve increases in sales and income taxes, as well as new business taxes. They believe Illinois has the right solution.
- The changes apply to most state and local employees but they do not cover police, firefighters and state troopers, who would continue to bargain for their benefits.
MESSAGE FROM THE MIDWEST: Democrats in the three states have always been a mouthpiece for the AFL-CIO, and they were consistently hostile to business. The result was less business, less revenue and less employment.
What liberal Democrats do not realize is that jobs are created by small businesses and lowering costs to employers. In all three states Democrats increased spending which required higher taxes, and they asked businesses to carry out their social agenda with laws, rules and regulations.
The latter hides the spending from political fall-out. The pattern is continuing in Illinois, but Wisconsin is now saying no and Michigan is about to join them. I do not know America’s fiscal future but an important part of the solution is now being decided in Wisconsin.
Americans must now stand with Wisconsin and stand with Walker. Their battle is our cause. ”On, Wisconsin!” is the state motto and was the cry of Arthur MacArthur in the Battle of Missionary Ridge in the Civil War:
“On, Wisconsin! On, Wisconsin!, Champion of the right, Forward, our motto, God will give thee might.”