Scott Walker’s plan: privatization giveaways to contributors, with a union-busting bonus?

The National Journal this morning uncovers another possible wrinkle in the Scott Walker union busting saga: whether his plan for balancing his state’s budget is actually a multiple bait and switch.

From the Journal:

…while Walker argues that his budget-repair legislation must be passed soon to avoid job cuts, the most controversial parts of his bill would have no immediate effect.
The state’s entire budget shortfall for this year — the reason that Walker has said he must push through immediate cuts — would be covered by the governor’s relatively uncontroversial proposal to restructure the state’s debt.

By contrast, the proposals that have kicked up a firestorm, especially his call to curtail the collective-bargaining rights of the state’s public-employees, wouldn’t save any money this year.
“What we’re asking for is modest, at least to those of us outside of government,” Walker said in a televised address Tuesday night.

In January, the Wisconsin Legislative Fiscal Bureau reported that the state would face a $137 million shortfall before the end of the fiscal year on June 30. The governor’s budget repair bill proposes a debt restructuring that would save the state $165 million in the near term, more than covering the shortfall.

The legislation would also borrow money from a federal welfare program to cover further state shortfalls, and it includes a provision that would allow the sale of the state’s public utilities without a bidding process or public oversight.

Even some on the right are questioning why, if Walker’s chief aim is budget savings, he would exempt police and fire unions, whose pensions are just as much a part of the budget as those of teachers and nurses. The answer most come to is pure politics. But it’s also possible that budget savings are entirely beside the point.

The bottom line question for Walker, who has now secured all the financial concessions he has asked for, but still won’t back down on breaking the union, is this. If his proposals won’t really save money, what’s the purpose of this fight?

None of the possible answers are good; whether its crippling Democrats in Wisconsin, eliminating union competition for corporate political power brokers, or more pernicious still: setting up the Koch brothers, who donated $43,000 to Walker’s campaign, to take over those public utilities without having to bid, or get legislative approval, even if Democrats were to win back the state houses.

The Journal continues:

The bill includes a provision that would allow the state to sell or contract out the operation of heating, cooling, and power plants without a bidding process and without consulting the state’s independent utility regulator. Democratic legislators worried aloud that the process would attract abuse, and Jon Peacock, director of the Wisconsin Budget Project, called the no-bid approach a “red flag.”

The bill also employs “emergency” powers that would allow the governor’s appointed health secretary to redefine the foundations of the state’s Medicaid program, Badgercare, ranging from eligibility to premiums, with only passive legislative review. The attorney in the legislature’s nonpartisan reference bureau who prepared the bill warned that a court could invalidate the statute for violating separation of powers doctrine.

The legislation, the lawyer wrote in a “drafter’s note” about the bill, would allow the state Department of Health Services to “change any Medical Assistance law, for any reason, at any time, and potentially without notice or public hearing… in addition to eliminating notice and publication requirements, [the changes] would leave the emergency rules in effect without any requirement to make permanent rules and without any time limit.”

So is Walker’s real aim two-fold: opening the door to his contributors, the Kochs, to take over public energy utilities, while also granting himself unilateral power to alter Medicaid laws, which in Republican parlance, usually also means privatization, often by forcing indigent patients into managed care?

An interesting find, from

Now, we can’t know for sure, but it’s a pretty good guess that the Kochs the ones who are apparently so confident they’re going to own the Wisconsin state-owned power plants, they’re already advertising to hire new plant managers!

“Energy client is looking for experienced Plant Managers for multiple power plants located in Wisconsin. You need 15+ years of operations & maintenance experience in a power plant environment. You should have at least 5 years of experience managing operations & maintenance teams in an operational power plant. The ideal candidate has experience in a coal fired power plant. Salary is commensurate with experience.”

And the Kochs are already well situated to lobby for a bigger piece of Wisconsin’s energy industry. From the Badger Herald:

…the sudden appearance of a lobbying firm on Doty Street for Koch Industries, owned by wealthy brothers Charles and David Koch, is reason enough to be alarmed.

The firm registered six lobbyists with the Government Accountability Board just two days after Gov. Walker’s inauguration. McCabe said he presumes they will lobby to have the budget repair bill passed and will be major actors in the legislative process.

Koch Industries owns four companies within Wisconsin — tissue, towel and wiper products manufacturer Georgia-Pacific and three other companies that supply, refine and distribute energy resources. Purchasing Wisconsin’s public power plants could increase the Koch brothers’ grasp on Wisconsin energy.

And the Herald reports this wouldn’t be the first time Walker has been accused of engineering favors for campaign contributors:

Walker had been criticized by Democrats for dolling out a political favor earlier in his term when he introduced a bill to allow one developer, campaign contributor John Bergstrom, to develop a protected wetland near Green Bay. Koch Industries gave more to Walker than the Bergstrom family.

Koch Industries donated $43,000 through its political action committee — only $125 short of the maximum allowed from a PAC — to Walker’s gubernatorial election campaign. The donation is Walker’s second highest from a PAC, according to GAB records.

And Walker clocked more than 1,100 campaign violations during his gubernatorial run, mostly for failing to disclose contributions in excess of $100.

Among the big dollar contributors: Daniel F. McKeithan, CEO of Tamarack Petroleum Company Inc., and Tom Ehrsam, CEO of National Insurance Services of Wisconsin, plus a number of contributors from the healthcare and financial services industries. View Walker’s campaign finance reports here.

Related: Walker takes a call from “David Koch”

As the New Republic points, out, the Medicaid angle is not insignificant:

Because Medicaid is a federal-state partnership, federal guidelines do impose some limits on what Wisconsin could do. The state could not, for example, stop offering coverage to children. And in order for Walker’s change to take effect, I gather, the federal government would have to issue a waiver. Typically the feds issue waivers only when states show they can improve or bolster coverage, not when they are looking to weaken it. But Walker’s budget effectively puts a gun to Washington’s head: If the state doesn’t get permission to change the program in the way he wants, under Walker’s proposal, it would simply reduce Medicaid to the bare minimum permissible under federal law.

To be clear, Wisconsin’s Medicaid costs really do represent a crisis right now. And in an ideal world, the federal government would help by doing what it’s done for the last two years: Provide states with temporary financial assistance, in recognition of the fact that the slow economy both increases demand for the Medicaid while reducing state resources. But make no mistake: Walker and his current Secretary of Health, Dennis Smith, have made no secret of their antipathy for Medicaid. Smith, who came to Wisconsin from the Heritage Foundation, has proposed that states withdraw from the program altogether rather than go along with expansions required under the Affordable Care Act. (I’ll have more to say about the states and Medicaid sometime soon; like everything else about Medicaid, the issue is pretty complicated.)

If the assault on Badgercare succeeds, tens of thousands of needy Wisconsin residents are likely to lose access to health care. That’s disturbing for its own sake. But it would be particularly sad, or at least ironic, given the program’s history. Badgercare has traditionally been among the nation’s more innovative and generous Medicaid programs—in part because Tommy Thompson, the state’s Republican governor during the 1990s, had expanded coverage in order to bolster his state’s welfare reform experiment. Thompson reasoned, correctly, that people would be more likely to leave welfare for work if it didn’t mean losing health insurance.

Thompson was a Republican who would go on to serve as Secretary of Health and Human Services under President Bush. But Thompson was more of a “compassionate conservative”—somebody who showed genuine interest in helping vulnerable people, albeit through different means than liberals generally preferred. Walker is a different kind of Republican and a different kind of conservative. If he’s at all interested in what happens to his less fortunate constituents, he has yet to show it.

Combined, the attempted power grab on Medicare, and the potential energy giveaways via privatization are an underdeveloped part of the Walker story that the media should pursue. A good start: going through those contribution reports with a fine toothed comb.

You can find a good explanation of the Medicaid angle on this story here.

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3 Responses to Scott Walker’s plan: privatization giveaways to contributors, with a union-busting bonus?

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