About President Obama’s Visit

President Barack Obama is coming to Milwaukee today to raise money for Milwaukee Mayor Tom Barrett’s campaign for governor. When the president arrives, he also will be carrying a bag full of borrowed federal money.

Last week, Obama signed a bailout bill for the states’ Medicaid and education budgets. Like Milwaukee’s recent flooding disaster declaration, there is plenty of money for the government to be found. The taxpayers, however, get shorted.

Of the $24 billion in “Son of Stimulus,” $16.1 billion is for education spending, ostensibly to prevent teacher layoffs. Wisconsin’s share of that education money is around $180 million.

The money for “Son of Stimulus” comes from a tax increase on business and a “cut” in the federal food stamp program. Except it isn’t really a cut. “Son of Stimulus” merely shortens by one year the expiration date of the expansion of the food stamp program under the Democrats’ original federal stimulus program. So really the Democrats in Congress and President Obama have merely shifted the borrowed money from one pocket to the other.

The new federal education money, of course, is counter-productive. It will not reward those school districts that were able to control costs successfully, including teacher compensation.

The “Son of Stimulus” will reward those districts like Milwaukee Public Schools (MPS) where the union has been intransigent on making concessions on health care benefits that would have allowed the district to avoid teacher layoffs. MPS planned to layoff 393 teachers this fall if the union failed to agree to a switch to a less expensive health plan that would have saved the district $48 million. In June 482 teachers were laid off by MPS but since then 89 have been called back.

The teachers union in Milwaukee also made news last week when it was announced they were suing MPS to have coverage of prescriptions for Viagra restored to their health plan. The little blue pills were dropped from MPS teacher health plans in 2005. If coverage of the erectile dysfunction medication is restored it is estimate the cost to the district will be $786,000. (That could keep a lot of teachers on the payroll, something about which the union seems to care not a bit).

As the MacIver Institute’s communications director Brian Fraley said on Sunday Insight this week, “You’re never going to get teachers’ unions to negotiate to make concessions to pay for health insurance, or whatever, as long as we know that Uncle Federal Government is there to bail them out.”

There was every incentive for the Democrats in Congress to pass the “Son of Stimulus.” Money from the bill goes directly to fund a core constituency, the teachers’unions. Aside from the votes the unions provide, the money will result in more teachers paying union dues. In turn, the unions will be able to support Democratic candidates more, and the symbiotic relationship continues, unabated.

The National Right to Work Committee estimates that local unions’dues could mean $40 million for the teachers unions nationally. The Wall Street Journal says a reasonable estimate of the percentage of teacher salaries that goes to union dues is between 1% and 1.5%. The teachers unions in Wisconsin could see between $1.8 million and $2.7 million in additional dues money, money that will ultimately benefit the Democrats.

This marks the first time that President Obama has returned to Wisconsin since the second Wisconsin failure in the federal Race to the Top education grant program. Obama originally announced the creation of the Race to the Top program in Madison last year when it was believed the president was actively courting the reluctant Barrett to run for governor. In exchange for all the borrowed federal money the president is bringing today, it would be understandable if the president asked Barrett why Wisconsin has failed to do well in the Race to the Top competition.

Fortunately for Barrett, the MacIver Institute has already created a report detailing the failure of the Democrats in the legislature, the governor and the educational establishment to make the reforms necessary for Wisconsin to be competitive for Race to the Top money.

So now, perhaps Barrett could explain to the President that while the extra federal money is nice even as it drives the country further into debt, the money has just alleviated some of the pressure on Wisconsin’s schools to reform.

Much like the campaign cash he’ll help raise today, more money can’t guarantee enhanced performance.

With the exception of funding Viagra coverage, of course.

By James Wigderson
Special Guest Perspective for the MacIver Institute