Sunday, March 6, 2011

Circus Maximus

In the mid-1990s, Wisconsin led the nation in draconian cuts to welfare. Governor Tommy Thompson, welfare commissioner Jason Turner, Republicans, and pliant Democrats in the state legislature ended welfare payments to the poor, requiring that they find work, work in subsidized jobs, or in “community service placements” or lose any claim on benefits.  In an expanding economy, it seemed to work well if you did not take into account the poor quality of the jobs, high turnover, and the continued economic insecurity facing poor Wisconsinites.  In fact, Wisconsin’s reforms catapulted Thompson and Turner into national prominence: Thompson became George W. Bush’s first Secretary of Health and Human Services and Turner landed a job as New York City’s welfare commissioner during Mayor Giuliani’s second term. Welfare recipients deemed “job ready” by the private agencies contracted to run the state’s largest welfare program in Milwaukee were thrown to the mercies of the labor market—usually involving commutes out of Milwaukee to suburban counties, if they found jobs at all—while the agencies collected money for every recipient purged from the rolls.

History repeats itself. Governor Scott Walker and Republican legislators’ “budget repair bill” repeats the politics of Wisconsin’s welfare reforms in several ways, though this time, thankfully, they cannot claim bipartisan support. 

First, welfare reform was framed against competition with Wisconsin’s neighbor, Illinois. At the time, there was fear of a black tide of Chicagoans fleeing the low welfare payments and high rents in Illinois, and crushing welfare in Wisconsin seemed the only way to stop it.  The $140 million in corporate tax-giveaways passed in Wisconsin that is the proximate cause of the year’s budget woes are meant to attract businesses from Illinois, which has dealt with its budget woes more responsibly, by raising taxes and cutting spending.

Second, like the poor, overwhelmingly black, and female welfare recipients before them, Wisconsin’s mostly white public workers, both male and female, face public shaming as lazy, entitled and greedy.  Some of Walker’s supporters are outraged that teachers in Milwaukee start at roughly $47,000 per year, with benefits, while the median income in Milwaukee—where nearly all of Wisconsin’s poverty is concentrated—is just $19,000. They apparently think that teachers should work at closer to the median wage. How you get a well educated workforce, most likely with student loan debt, to work for much less is difficult to see. But the entire picture suggests what public workers have always known: Opponents of public spending will always paint public employment as a more expensive version of the dole.

Third, this round of reform stinks as badly of cronyism as did the last.  With welfare reform, the state—not trusting Milwaukee administrators to be tough enough—mandated the privatization of welfare services. By paying agencies for kicking people off welfare, the state officially put the foxes in charge of the henhouse. And soon, most of the providers were caught in corruption scandals. One for-profit firm, Maximus, did consulting for other states on Wisconsin’s dime, even while Jason Turner’s family was in their employ. When Turner came to New York, he brought Maximus with him.  Walker’s bill raises the stakes. It authorizes the privatization of state-owned power plants without public review or competitive bidding, and in a different version of Mr. Fox’s henhouse insurance, it puts all Medicaid decisions in the hands of an anti-Medicaid state administrator, again without public input.

Finally, all of these similarities between past and future are brought together by the behind-the-scenes funding structure: Walker and his allies share funding not just from the Johnny-come-lately Koch brothers, but also from the Bradley Foundation, a Milwaukee-based sugar-daddy of the right (though both the Kochs’ father and Harry Bradley were early John Birchers). The Bradley Foundation was crucial to funding welfare reform efforts in the 1990s, and in taking Wisconsin’s experience national, providing crucial funding not just to Wisconsin-based conservative organizations, but to national outfits like the Hudson Institute and local ones, such as New York’s Manhattan Institute, and to academics like NYU’s Lawrence Mead, who has done more than anyone else to dress up Wisconsin’s corruption and cronyism in the respectable dress of moralistic good government.

With Walker’s overreaching, however, the mask, perhaps, has begun to slip.

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