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In March 2011, Wisconsin Governor Scott Walker (R) signed into law a bold piece of legislation to address his state's $3.6 billion budget deficit, the Wisconsin Budget Repair Bill. Thursday at AEI, Gov. Walker discussed the four options – raising taxes, laying off public employees, cutting core services and accounting gimmicks – he rejected when determining how to balance the budget. He then emphasized the benefits of his long-term structural reform policies for compensation, pensions and health insurance for public-sector employees. Andrew Biggs, a resident scholar at AEI, praised Walker's reforms. He emphasized that although salaries for public employees in Wisconsin were lower than for private-sector workers with the same skills, benefits significantly increased the total compensation of public employees compared to their private counterparts. Biggs also pointed out that public employees in Wisconsin pay less toward their health insurance than most private-sector employees and pay little or nothing toward their pensions.
Gov. Walker then delved into one of the most contentious aspects of the Budget Repair Bill, stressing that collective bargaining is not a right but an expensive entitlement. In response to a question on the lessons he has learned, Gov. Walker emphasized the importance of getting the message out to the public early and spending adequate time talking to constituents. Despite the contentious response to his reforms, Gov. Walker stated his intention to run a positive campaign during the recall election he expects to face in June.
In March 2011, Wisconsin Governor Scott Walker signed what is now nationally famous legislation designed to balance the budget, make structural reforms to state spending and provide budget flexibility to local governments. As many states have struggled with deficits, laying off public employees and raising taxes, the question is whether Wisconsin's reforms are successful and could be a model for sustainable fiscal discipline.
Gov. Walker will discuss with Andrew Biggs how his plan has impacted Wisconsin's short- and long-term fiscal health, unemployment rate, economic growth, business environment and fiscal health of local governments. He will also talk about how national and state public employee union leaders have opposed Wisconsin's reforms, including their current attempt to recall him.
GOVERNOR SCOTT WALKER, (R-Wisc.)
ANDREW G. BIGGS, AEI
NICK SCHULZ, AEI
Question and Answer
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Andrew G. Biggs is a resident scholar at the American Enterprise Institute. Prior to joining AEI, he was the principal deputy commissioner of the Social Security Administration (SSA), where he oversaw SSA’s policy research efforts and led the agency's participation in the Social Security Trustees working group. In 2005 he worked on Social Security reform at the National Economic Council and in 2001 was on the staff of the President's Commission to Strengthen Social Security. Mr. Biggs’s work at AEI focuses on Social Security reform, state and local government pensions, and comparisons of public and private sector compensation. His work has appeared in academic publications as well as outlets such as the Wall Street Journal, New York Times and Washington Post, and he has testified before Congress on numerous occasions.
Nick Schulz is the DeWitt Wallace Fellow at AEI and editor-in-chief of American.com, AEI's online magazine focusing on business, economics and public affairs. He writes the “Economics 2.0” column for Forbes.com, in which he analyzes technology, innovation, entrepreneurship and economic growth. He is the co-author with Arnold Kling of “From Poverty to Prosperity: Intangible Assets, Hidden Liabilities, and the Lasting Triumph Over Scarcity.” He has been published widely in newspapers and magazines around the country, including The Washington Post, The Wall Street Journal, The Los Angeles Times, USA Today and Slate.
Governor Scott Walker (R-Wisc.) was elected to the Wisconsin State Assembly in 1993. While there, he chaired several committees and authored important pieces of legislation, including Truth-in-Sentencing, photo identification requirements to vote and the elimination of the statute of limitations in sexual assault cases. In 2002, he was elected Milwaukee County executive to reform the scandal-ridden county government, a position in which he served for eight years while cutting the county’s debt, reducing the county’s workforce and creating a budget surplus. On January 3, 2011, he was inaugurated as Wisconsin's 45th governor. Since then, he has proposed bold reforms that have eliminated the state's $3.6 billion budget deficit without raising taxes and given school districts and local governments the tools to balance their budgets without the massive layoffs seen in other states. To date, these profound changes have saved Wisconsin taxpayers over $765 million. Gov. Walker also remains committed to helping Wisconsin's private sector create 250,000 jobs by 2015.