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Wednesday, October 20, 2010

Can we trust the allies of the public employee unions to fix the problems they helped cause?

Michael Barone points to this post by Charles Lane of the Washington Post about the dangers for the Democratic Party in its alliance with the public employee unions. Lane notes how the unions represent the major funding and workers for the Democrats. He adds this perceptive comment.
But in an era of increasing discontent over taxes, government spending and the perks of government employees, these are not necessarily the allies you want to have. A party that depends on the public employees to get elected will have trouble reaching out to the wider electorate -- i.e., the people who pay the taxes that support public employee salaries and pensions.

In politics, you never want to find yourself beholden to a minority whose core interests often clash with the interests of voters. Yet that is exactly where Democrats at all levels of government could find themselves after Nov. 2.

This dilemma could be particularly acute for three of the Democratic gubernatorial candidates who appear likeliest to emerge victorious: Jerry Brown in California, Andrew Cuomo in New York and Martin O'Malley in Maryland. Each would take office in a state burdened by huge public-sector health benefits and pension liabilities. Yet tackling that problem would inevitably put each man at odds with his state's unions -- the very people who helped him get elected.
Right now all three of those candidates are in the lead to become governors. And then they'll face a choice: either continue down the ruinous road that is already endangering their states' futures, or turn around and bit the hands that shoved them into office. Of course, they won't dot that. And their leadership will only deepen the already calamitous budgetary future facing their states.

We are becoming two Americas - those that work for the government and those that don't. And those that are public employees will then press government to raise taxes to fund their generous benefits. We're seeing that now in Washington state as William McGurn reports. In Washington there is a proposed new income tax on the ballot. While there are billionaires funding both sides of the fight, the real push is from the unions. About 2/3 of the funding for those favoring the proposition is coming from unions.
Far from a civil war among the rich, the push for I-1098 is being led and financed by unions. In a day when organized labor claims more members in government than in the private sector, it's not surprising to learn that public-employee unions are front and center. Their leadership raises a question asked by beleaguered taxpayers across America: Do state budgets exist to serve their citizens or their government employees?

If you read the talking points, the unions are involved in this initiative because they see it as the only way to maintain vital health-care and education services. Under I-1098, that would mean a new 5% tax on individuals earning more than $200,000 a year and couples earning more than $400,000. An additional 4% would kick in for individuals earning more than $500,000 and couples making more than $1 million.

Here's a better way of putting it. By taxing others, these unions want to insulate the governor and the legislature from having to make difficult choices about what the government should fund and what it might cut back.
This is the battle faced in state after state. Governor Chris Christie is trying to bring some rationality to New Jersey's spending by pointing out the impact of similar high taxes on employer flight from the state. But the public unions don't care. They need those taxes to pay their benefits. And they'll be sure to elect Democrats who will then support those tax increases and those generous benefits. Do you sense a formula here? It's a disastrous one.


pumping-irony said...

And those state income taxes are generally NOT indexed for inflation. So a few years down the road, when the fruits of the Fed's quantitative easing "cure" (i.e. printing lotsa money) for our current economic malaise is visible to all, a $200,000 income may be enough to buy you what 50K does today. But you can bet your last dollar (before the state takes it) that those soak-the-rich income taxes will still kick in at 200K. Government of the unions, by the unions and for the unions...

equitus said...

Public employee unions are the face of greed and selfishness in today's world.