The Fiscal Crises: Doing vs. Talking

Right From the Start

Put your own house in order.” Anonymous

Most of us growing up heard this telling phrase from our parents when we sought to criticize others. For those of you forced to endure an education in the Portland Public School system, it simply means that you should solve your own problems before telling others how to solve theirs.

It’s advice that President Obama should have observed instead of sounding off about the attempts of Gov. Scott Walker to deal with Wisconsin’s fiscal mess. While Obama in his State of the Union speech and his “earnest” press conferences since last November’s elections talks a good game – he always does – his budget fell dramatically short of his rhetoric – it always does. Having already added $5 Trillion do the national debt, Obama proposed a budget that will add another $7 Trillion over the next ten years.

Wisconsin faces a $137 Million shortfall for the remaining four months of its current fiscal biennium and a $3.6 Billion shortfall for the next biennium. A substantial part of that fiscal mess is attributable to the public employee unions – wages in excess of private sector equivalencies, gold-plated pension plans for which public employees pay practically nothing, and top-of-the-line health insurance for which public employees pay practically nothing. Sound familiar? It should. Oregon’s budgetary mess is almost identical.

Like Oregon, the public employees unions dominate the Democrat party that relies on the bottomless purse of mandatory union dues collected free by the state and transmitted to the public employee unions for all of its political purposes. Like Oregon, the Democrat’s solution to last biennium’s fiscal crises in Wisconsin was to raise taxes and continue spending like there was no tomorrow.

But that is where the similarities end. Wisconsin voter’s, outraged by arrogance of the public employee unions – their rich salaries, their overly generous healthcare program, and the mounting unfunded liability for their pension program – said enough and threw the bums out. Oregon, in contrast, elected a tired, old former Democrat governor and returned a Democrat majority to the Senate – both wholly beholden to the public employee unions because of their limitless campaign contributions. Not since 1938 has Wisconsin undertaken such a clean sweep – a complete change of government from one party to the other.

In Wisconsin, Gov. Walker and his new Republican majority in both houses moved forward with their commitments to roll back spending and curtail the abuses of the public employee unions. You see, in Wisconsin, the Republicans were able to precisely explain that while collective bargaining in the private sector is a cherished right to be respected, the same is not true in the public sector. In the private sector, the unions – responsible to the members – bargain with an independent management – responsible to their shareholders. There is a natural balance between the wishes of the employees to maximize their compensation and the management’s needs to control cost to remain competitive.

But in the public sector, public employee unions bargain with a management whose campaigns they financed and who are dependent on the union’s financing for re-election. There is no balance. That imbalance is exacerbated when the government – controlled by those who financed their elections – collects and remits the money used by those unions to finance their elections, eliminates the right of a secret ballot to determine whether the union should represent employees, and bars the use of private contracting (outsourcing) for any function ever performed by a public employee.

The union movement in America is waning – everywhere but in the public employee sector. A January report by the United States Department of Labor’s Bureau of Labor Statistics noted:

“In 2010, 7.6 million public sector employees belonged to a union, compared with 7.1 million union workers in the private sector. The union membership rate for public sector workers (36.2 percent) was substantially higher than the rate for private sector workers (6.9 percent).”

The report also noted that the union movement had a net loss of 612,000 jobs – all from the private sector.

And therein lies the reason for President Obama’s failure to address the national budget crises while feeling free to criticize the budget solutions in Wisconsin. Historically, the union movement has been a principle player in the Democrat Party. With the continuing diminution of the private sector unions, the Democrats find themselves turning more and more to public employee unions for financial and logistical support. No president has been as beholden to the financial resources of the public employee unions as Mr. Obama. The ability of the public employee unions to raise hundreds of millions of dollars through federal, state and local government mandatory payroll deductions provides virtually unlimited financing for those Democrats prepared to do the public employee unions’ bidding.

To tackle the federal budget not only requires dealing with so-called entitlements; it requires dealing with the same issues confronting Oregon – too many public employees being paid too much in salaries and receiving healthcare and pension benefits far in excess of their private sector counterparts. And trust me, Obama will have to be dragged kicking and screaming to deal effectively with these problems.

Pres. Obama’s debt commission recognized the unsustainable burden imposed by entitlement programs – Social Security, Medicare, and Medicaid. Add Obamacare to that list of budget busting entitlements. Obama declined to address any of these in his budget because he lacks courage and leadership. The debt commission also recognized the problem of the unfunded future liability for public employee pensions. Obama declined to address these because he is beholden to the public employee unions.

But he did recognize the threat to the largesse of the public employee unions in Wisconsin – not because Gov. Walker wants to curtail the areas of collective bargaining, but because a part of the package would require the unions to collect their own dues rather than having the state collect and remit them for the unions. When that happens the financial power of the public employee unions drops dramatically and the political imbalance begins to right itself.

But then again, its much easier to tell others how to correct their problems than it is to correct your own problems. President Obama put your own house in order first. And Gov. Kitzhaber, step up! You cannot address the fiscal problems of Oregon without addressing their cause – the abuses fostered by the public employee unions.

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Posted by at 05:00 | Posted in Gov. Kitzhaber, Leadership, President Obama, State Budget | 55 Comments |Email This Post Email This Post |Print This Post Print This Post
  • NothappywithO

    The whole middle east is in turmoil and our country is broke and this guy goes to Cleveland to tell a bunch of losers that we can win the future.
    Great.

  • Kriticul_airer

    Did you feel that? Was that an earthquake? No… just Oregon Democrats and their Union parasites shaking in their boots… I’m getting ready for Oregon’s Wisconsin moment… won’t be long now.

    • Joe

      I would love to believe the time is coming,however I think the parasites in Oregon outnumber the host.

      • Kriticul_airer

        You’re right Joe… parasites don’t willingly leave the host, they must be forced out. Public workers had their rally last Monday… they are scared. The internet is accelerating this change.

    • Joe

      I would love to believe the time is coming,however I think the parasites in Oregon outnumber the host.

  • Crater

    I think O is brave to go to Cleveland. They have high unemployment – almost as much as Oregon – and yet he goes and bravely tells them to wait for his spending binges to bring jobs.
    Not gonna happen.
    Nevertheless, he is brave to attempt such bold faced lies.

    • Yes, BHO cons

      Know, BHO is a CONmunity organizer with a narcissist ID and facets based in Marxist Socialist Pied Piperism.

  • Rupert in Springfield

    The original purpose of unions was purportedly to counter employer abuses.

    While this may have been true in the private sector, one is pained to try and extend this logic to the public one. The concept of overworked, underpaid and dangerous working conditions at the DMV is obviously laughable. Thus, in the public sector, unions were founded for one reason, to extract money. The main strategy for doing so being the ability to deliver large blocks of votes to the politicians beholden to them.

    I think at this stage of the game its time to reassess. If unions were established to combat abuse by the employer then clearly there can be no argument against their dissolution when the situation is now clearly the reverse.

  • Bob Clark

    The public employee unions deserve the people’s disdain. Either these unions drop their collective bargaining rights; or alternatively, they should be barred in all means from contributing to elected office campaigns. These two things together corrupt the democratic process as it has for decades in Oregon. The public grows wary, and wants one of these two public employee union levers eliminated.

  • valley person

    A new USA Today/Gallup poll says pretty solid majorities support the public workers in Wisconsin over the right to bargain collectively for wages and benefits. Surprisingly, a majority also doesn’t even support cutting wages and benefits for public workers. I think you guys are on the minority side of things once again.

    http://www.pollingreport.com/work.htm

    • conservatively speaking

      BlueOregon and MoveOn.org, et al, no doubt support your smart sass.

      But frankly, monsieur Valley Person, “Common Sense” tells the rest of US what is necessary to prevent our going “Broke.”

      Omen.

    • conservatively speaking

      BlueOregon and MoveOn.org, et al, no doubt support your smart sass.

      But frankly, monsieur Valley Person, “Common Sense” tells the rest of US what is necessary to prevent our going “Broke.”

      Omen.

    • Hector

      Gosh, you don’t support any of those union lovers would pad those polls, do you? Good try, Valley Person, the “reliable” polls show that the majority of voters favor the position of Gov. Walker by a considerable spread and, more importantly, that the trend in support for public employees’ unions is DOWNWARD. The scene they are causing in Wisconsin and the information about Public Employee Union greed that has come out in the last week should go a long ways toward turning public sentiment strongly against the Public Employees Unions. I certainly hope so! What I don’t get is why the voters in Oregon are so stupid that they can’t seem to understand how they are getting ripped off by these Public Employee Unions. You know the “employer” that these Unions are bargaining with are actually Oregon Taxpayers. Yet we have the Unions handing money under the table (via campaign donations) to Oregon’s elected officials who are supposed to be doing the bargaining on BEHALF OF THE TAX PAYERS. Let’s all think hard about where the “loyalty” of these elected officials lies! Just imagine anything like this happening in a private corporation! The negotiators taking the money under the table from the Unions would be fired in a heartbeat. But evidently, it is OK when the employer is the Taxpayers and it is Taxpayers Money being handed out to the so-called “negotiators” for the purpose of screwing the Taxpayers.

      I wonder how much of the so-called Stimulus Money that Oregon received was used to keep public employees in their jobs, along with their “mandatory” union dues? Now let’s all connect the dots and figure out what the real reason was for the Stimulus Money paid to Oregon- because it sure as heck was not to create any jobs in the private sector. In the months to come, many more Americans are going to wise up to Obama’s end game, which is to grow government, grow the public employees unions and, thereby, grow the amount of campaign contributions that these unions have available to keep Democrats, including him, in power at Taxpayers’ expense. They will finally realize that it was never Obama’s intent to create jobs in the private sector and that they have been duped. I wonder when Oregonians will finally get it? Maybe when they look in the Piggy Bank and see that it is really, really empty – no kidding!

      .

      • valley person

        USA Today/Gallup is as neutral and reliable of a polling group as there is. I don’t know how unions would be able to “pad” it, but if you want to believe that, be my guest.

        The same poll shows support for public unions in general to be about 50-50. Whether this is upward or downward from past polls, I don’t know.

        What “greed”? The unions in Wisconsin agreed to all the cutbacks the governor has asked for. The only disagreement is over bargaining rights.

        A lot of stimulus money funded public employees, particularly teachers. That is a bad thing? We are better off laying off public workers when unemployment is at 9 or 10%? I don;t think so friend.

        Obama can’t create jobs in the private sector. Only the private sector can do that. And they won’t do it until demand picks up. And that won’t happen if you keep laying people off.

        • Usatoday

          Yes, USA Today is to be trusted. Enough of these union bashers. Without unions the incompetent would have a hard time getting work.

        • Hector

          Valley Person, you say, “What “greed”? The unions in Wisconsin agreed to all the cutbacks the governor has asked for. The only disagreement is over bargaining rights.”

          No, you are wrong. The Unions “agreed” that their members, the people that work for the Taxpayers, would start contributing (for the time being) a little bit more to their health premiums and pension plans. Even with this minuscule concession, Public Employees are not contributing anything close to those working in the private section – yet we are all supposed to fall on our knees in gratitude for this concession! Yet, the Unions flatly refuse to do anything “long term.” They refuse to limit their collective bargaining to salary – so guess what, in the next go-round, the “cutbacks” they supposedly agreed to are right back on the table to add back in, aren’t they! That, Valley Person, is a meaningless “cutback.” Public Employees’ contributions to their health insurance and pension plans in the future need to be taken off the table for collective bargaining and the trend needs to be toward greater employee contributions, not less. Public Employees need to start contributing fairly to their health insurance and their pension plans – just like the rest of us do.

          The “only disagreement” is not over “bargaining rights.” Here is what the Unions really care about – THEIR PRECIOUS MEMBERSHIP DUES!! For the Unions, it is ALL about getting their hands on hundreds of millions of Taxpayer dollars in order to perpetuate themselves, their political power and the corrupt politicians that they buy off with these Taxpayer dollars. It is time to cut off the Unions from the flow of massive amounts of our Taxpayer dollars. The REAL ISSUE for which the Unions have marshaled their “useful idiot” members to storm Madison is Gov. Walker’s attempt to bring an end to the MANDATE that Wisconsin Public Employees must have their Union Dues deducted from their paychecks (i.e. the Taxpayers’ money) and actually give the individual Public Employees the right to voluntarily pay or not pay Union Dues.. Now what exactly is so outrageous about this?- Unless, of course, you are the greedy, power-hungry Union Leaders and the greedy politicians to whom they hand out the Taxpayer dollars they siphon off from the Mandatory Dues they get from Public Employees. If the Unions are so great for Public Employees, then what is so terrifying to the Unions about Public Employees “voluntarily” paying Membership Dues?

          Also spare me the flimsy argument that we can’t “lay off” public employees because it will add to the “unemployment” numbers. The States and the Taxpayers do not exist to “create jobs” for anyone. Public Employees, whom you apparently think we Taxpayers should keep “on the job” for “economic” reasons, CONTRIBUTE NOTHING to the economy. They produce NOTHING; they do nothing but EAT UP our Taxpayer Dollars! We could spend ourselves into oblivion on Public Employees and never move the “economy” ahead by one inch! What am I talking about? THAT is exactly what Obama and the Democrats have been doing for the last 2 years! Need I say more! What you don’t seem to appreciate is that for every dollar the Taxpayers have to pour down the rathole of employing far too many public employees and funding their fabulous health care and pension benefits is a dollar that is NOT going into the private sector to actually GROW the economy. I say FIRE all of them and let the State contract with the private sector to do whatever work these public employees do. Let the private sector pick up the tab for salaries, healthcare and pensions benefits for their employees – then the market will dictate what these costs are, and not a bunch of Taxpayer-funded Union thugs!

          • valley person

            Since the economic crisis is temporary, why should workers agree to more than a temporary fix? And why should unionized workers agree to match the benefit packages that non-unionized workers get? The argument is the other way. Non unionized private sector workers should wake up and get organized, otherwise all workers will continue to lose ground.

            “Voluntary” membership dues are basically what right to work states have. They let some workers opt out and ree ride on others. As a union member, you should know this.

            The private sector cannot and will not operate at full employment. Public sector payrolls provide customers for private sector businesses. No customers no business. Its basic economics. Plus, the services the public sector provides enable the private economy to flourish. Clean water, sewage treatment, roads and bridges, police, fire, teaching and skill development….take that away and the private sector would be functioning at the level of Chad.

            The private sector Rob, has plenty of capital to expand. It isn’t doing so. How would firing more public workers help the private sector?

  • Rob DeHarpport

    The facts speak volumes, Unions only make up 12% of the work force. Rupert is spot on about the need of Unions in the public sector, it is laughable. As a Teamster of 30 years and a Shop Steward for 20 yrs. I know just when a union is really needed to protect ones job, in my 20 years as a shop steward I can remember ONE time. As for collective bargaining, the public sector needs to take a long honest look at their wages & benefits, then contrast them to the taxpayers who pay their wages. Only a complete fool could argue that they need collective bargaining any longer. How much longer can we the people be expected to fully cover the rising cost of PERS, health insurance and virtual unchallenged wage increases? Believe it or not, the taxpayers pockets are empty. When a company is pushed to the brink- the company sells workers on facts. That’s all we need to do in this case is present the facts, they are readily available. Facts show the rate of government growth vs. public sector, the costs of PERS vs. 401k plans, etc. etc. etc.The cart is full, the taxpayers are tired of pulling so much dead weight. The line has been drawn in the sand, finally.

  • Disillusioned Smith7

    This is enlightening… ” There is a fundamental difference between private and public sector workers. A private-sector labor dispute is a clear clash of competing interests, with management representing shareholders and unions representing workers. In the public sector, taxpayers – whose position is analogous to that of shareholders – are usually denied a seat at the table:
    Such unions are government organized as an interest group to lobby itself
    to do what it always wants to do anyway – grow. These unions use dues
    extracted from members to elect their members employers. And
    governments, not disciplined by the need to make a profit, extract
    government employees’ salaries from taxpayers. Government sits on
    both sides of the table in cozy “negotiations” with unions.

    Collective bargaining in the public sector thus is less a negotiation than a conspiracy to steal money from taxpayers. The notion that this is “in the economic interests of the middle class” for government employees in Wisconsin and elsewhere to get above-market wages and extremely lavish benefits is just laughable. Sure, government employees are “middle class,” but so are the vast majority of taxpayers who don’t enjoy the special privileges that come from owning the means of coercion. “

    • valley person

      If what you say were true then public workers would all be millionaires. They aren’t. They make pay that fits with their training and education. I was a public sector professional for 11 years, and I now make about 15% more in the private sector for comparable work. Pensions and health benefits are generally better for public workers, but salary isn’t.

      Many public sector workers are not even in unions. If you supervise even 1 person you are normally not in the union. Many or most public sector workers cannot strike.

      The public, us, are represented by who we elect to do the negotiations. Its not practical to have all of us at the table.

      States that do not have public unions are in just as deep of holes as those that have them. Find another scape goat.

      • Rob DeHarpport

        The data is out there for all to see valley person. Take your blinders of or pull your head out of the sand.
        I’m glad you are making more $ in the private sector! Good for you! Your 4th paragraph says it all very clearly & concisely.” We are represented by those we elect”. Look at the organizational structure of the public unions- they are geared to pour massive amounts of money behind the Democrats and their own initiatives-i.e. look at the millions the unions dumped into measures 66 & 67, who benefited from those taxes??????? It’s time to level the playing field. This comment is coming from a common sense lifelong union member.

        • valley person

          Well good for you Rob. I’ve never been a union member myself, but plan to join one as a protest against these efforts to kill them.

          States that lack collective bargaining rights have the same budget problems as states that do not. How do you explain this?

          The only reason public unions support Democrats is the same reason all unions support Democrats. Its because traditionally, Democrats favor policies that help working people and Republicans favor policies that favor owners. Its not like some sort of plot. To the extent Republicans are hostile to working people, unions will try to defeat them. Its called democracy.

        • valley person

          Not that it matters to most Catalyst readers, but analysis shows very little relationship between how unionized a state work force is and how deep its budget problems are:

          http://www.theatlantic.com/business/archive/2011/02/what-really-matters-for-state-budgets/71651/

      • Disillusioned Smith7

        The problem is not the public workers. The problem is the PUBLIC WORKER UNIONS!!!

    • valley person

      If what you say were true then public workers would all be millionaires. They aren’t. They make pay that fits with their training and education. I was a public sector professional for 11 years, and I now make about 15% more in the private sector for comparable work. Pensions and health benefits are generally better for public workers, but salary isn’t.

      Many public sector workers are not even in unions. If you supervise even 1 person you are normally not in the union. Many or most public sector workers cannot strike.

      The public, us, are represented by who we elect to do the negotiations. Its not practical to have all of us at the table.

      States that do not have public unions are in just as deep of holes as those that have them. Find another scape goat.

  • Mary’s Opinion

    Mr. Huss,
    Thank you for your clear, concise explanation. Anyone who doesn’t understand the issues regarding how public employee unions work and the problems they create after reading this article, is totally closed to reason.

  • Ndngrrl

    I was robbed by an Oregon union. I was starting as childcare provider for a young single mother through the State Family Services agency. Nobody told me that a union had taken over on the childcare program. I was not told in advance that I would be put into that union or have funds automatically taken from my paycheck. When I discovered that a fee had been removed from my first paycheck, I inquired as to why I was shorted. I was told that I was in the union and the funds were taken for the dues. None of this was anything that I wanted, I didn’t ask to join them and was not given any advanced notice of unionism. When I asked for my money to be returned, I was basically laughed at. The fees would be taken whether I was a union member or not. The choices were shut up and go along with their unauthorized, forced fee payments or quit. I quit and still have a sour taste from the way I was treated. It’s not right that they can force their will onto people, take fees without any way to appeal that action and don’t even have to give notice that the program was unionized or of what they will be intending to do to a childcare provider’s paycheck in their money grab. Even the State office where I phoned to ask for help in getting my money back said they couldn’t do anything about it.

    • Joe

      That is the typical union method. They know if union dues were voluntary they would cease to exist. The only word to describe this is extortion.

  • Notworthadime

    Right to work states hurt workers. Without a union, how could someone who is no good at their job make a bunch of money and get lifetime medical benefits and a huge retirement?
    So, as you can clearly see, these unions serve a purpose. They insure jobs for the incompetent.

    • valley person

      The average wage in right to work states is over $5000 below the average wage in unionized states. That is not the average for public workers. Its the average for all workers.

      Why do catalyst supporters want to roll back average wages by $5000? What do you think that would improve?

  • OrregonNative

    Mary I can not seem to find a Mr.Huss you responded too, you might know something we all might not know.

    Anyway, I am not against Teachers, but 4 to 5 administrators per teacher. A Classic example of happen in our small town. A teacher applied for the principle job with a pay raise( of course ), and accepted by the school board. The raise of course was more about $70,000. He had many PERS years in as a teacher but now his BASE RATE was increased to his new salary. He retired in 1 year at 55. Well now 10 years plus with the rate of living increase, the taxpayers are paying about $100,000.00 per year for a retired teacher that was originally at $ 45,000.00 and jump to $70,000.00. He is using the system.
    Let us take about mabey 1000, 5000, 10,000 people doing the same thing. Wow, 10,000x 100,000, now wonder we are broke.
    All the stimulus money was used for the public sector, just to keep it afloat a little longer. Wisconsin and Ohio is just the tip of the iceberg.

    • Mary’s Opinion

      OrregonNative,
      At the very top of the page, under the title of this article is the name of the author of this article.
      As for the teacher in your small town who became the principle, I don’t approve of the rules that determine PERS benefits either. But do you have the slightest idea of the college education costs that qualified that person for the credentials that are required to even apply for the position of principal? The person was using the system to his/her best advantage. Isn’t that what employees do in the private sector when they seek upward mobility? Blame the system not the teacher.

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