Scott Walker Won Because He Took Action Against Soaring Pension Costs

The Wisconsin governor rammed through legislation that cut soaring pension costs and entitlement funds. Even though it certainly harmed many, they still voted him back in office—because his decisive action was appreciated, writes Zachary Karabell. 


Wisconsin Gov. Scott Walker survived his recall vote with surprising ease. This contest is already being used as a proxy for the November general election, with tea-leaf reading being in ample supply. Republicans have been quick to crow that the victory represents a referendum for conservative fiscal policy and austerity in the face of soaring pension and medical expenses, while Democrats have noted that Walker raised far more money, recall elections are notoriously rare and difficult, many voted against the recall on the principle that elections should not be redone, and recalls should not be a recourse to express discontent with policies.

Whether this election has any real ramifications for November is questionable, but it does send a message that Democrats seem to be avoiding: there are real issues with the long-term spending obligations for retirement benefits. Current growth rates in the United States do not support the level of future obligations, and this should not be in dispute. Soaring obligations of municipalities, counties, and states have been so well documented that they should be taken as a first principle in any political debate. Michael Lewis’s searing portrait of Vallejo, Calif., where 80 percent of the city’s budget went toward benefits for public-safety workers, is a story that could be told across the country. Walker attempted a solution to this problem when he rammed through legislation last spring in Wisconsin that stripped public unions of their collective-bargaining rights and then passed laws reducing pay and benefits.

There have been plenty of arguments against Walker, including that he used the legislation to do a variety of other things—along with the Republicans in the Wisconsin Legislature—such as reducing taxes on the wealthy and corporations and cutting school budgets. His detractors have argued that these measures were odious and objectionable that served very particular special interests and not the public good—and they harmed many Wisconsin citizens. But it can’t be argued that those pension and retirement obligations are sacrosanct, especially given that most of them didn’t exist a few generations ago and many of them became more expansive in the past decade.

There are better ways to go about dealing with those issues. You could grandfather current benefits for those older than age 45; you could reduce future commitments over time; you could increase the retirement age. You could also, as Walker failed to do, negotiate and engage unions with a common goal of preserving a standard of living with that old cliché “shared sacrifices.”

Yet here lies the most disturbing part: Democratic Milwaukee Mayor Tom Barrett, Walker’s challenger, did some of that as mayor, and the result was that when he ran for governor in 2010, his support from those public unions was lukewarm at best.

Barrett, in fact, has become almost as much a target for the left as Walker. The defeat of the recall is being chalked up to Barrett being insufficiently pro-labor and hence reducing voter enthusiasm for the recall. In that narrative, Walker is a heartless union buster and a tool of the Tea Party and its billionaire backers, while Barrett is basically a me-too Democrat offering a watered-down version of the same. No wonder that the recall failed and unions are being forced to sacrifice on the altar of privilege.

Walker may be all those things, but that doesn’t mean that the core issue of spending versus growth is null and void. Democrats are showing a disturbing tendency toward inflexibility about future obligations, and the Republican willingness to confront that issue—however harshly—is a profound electoral advantage. In the face of understood and looming challenges, having an answer is always more potent than having none, even if that answer is completely misguided. The federal Simpson-Bowles commission, which was as unequivocal about the untenable trajectory of future spending, enjoined everyone to confront that by addressing all spending and all tools to both boost revenue, sustain growth, and reduce costs. That meant everything from tax increases to health-care-spending cuts to defense-spending reductions. And it was dismissed.

Europe is currently confronting the mismatch between its social spending and its growth prospects and doing so under extreme market conditions that constrain options and accentuate differences. The United States is not there—yet. Contrary to partisan polemic and entrenched beliefs that those of different political persuasions actually desire harm to large swaths of the country, it is possible to address these issues in a way that causes some adjustments for everyone without intense hardship. For instance, is it a hardship for someone now 35 years old that retirement age will be 67 rather than 65? In fact, it’s clear that the static system we are in already is generating intense hardship for many, so why does the current system even need defending?

One way or another, our current series of public obligations is going to change. Even if the United States realigns on a growth trajectory that eases these tensions, retirement spending, health spending, and—of course—defense spending will need to cease increasing at their current rate. Whether health-care benefits are stripped or whether health-care becomes a state-delivered single-payer system, costs must come down, or else other aspects of our lives will be diminished. Decry what Walker did, or celebrate it, but acknowledge that one reason that he has won this round is because he forcefully addressed a real issue and actually devised policies to solve it. Unless Democrats can do the same, this will not be the only losing battle.