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Mr. HATCH. Mr. President, I rise to comment on the results of last night's recall election in the State of Wisconsin. After nearly 2 years of heated political debate, the people of Wisconsin made it clear last night that they are not suffering from buyers' remorse. Two years ago, they elected leaders committed to solving their State's budget crisis. Last night, they stood by those leaders for making the hard choices that turned Wisconsin's deficit into a surplus.
Yesterday's election was very important. It was important because of the example it provides to the Nation and the world of how a democracy should work, with citizens who disagree vehemently about policy nonetheless coming together to accept the results of an open and fair election.
It was important because of the message it sends with respect to public employee unions. Last night's results serve as yet another reminder that the American people want serious answers to our Nation's fiscal problems, and they are tired of having labor unions dictate the terms of our economic recovery.
Scott Walker never hid his agenda. He ran for office on a platform of reducing State spending, and Governor Walker immediately began addressing the State's problems after taking office. So what egregious acts did Governor Walker commit during his first months in office to trigger this recall? First of all, his budget repair bill actually required Wisconsin State employees to contribute more to their pensions. Prior to passage of the Walker budget, many State employees did not contribute to their retirement benefits.
You heard that right. Facing a massive State deficit, Governor Walker determined that Wisconsin taxpayers should no longer foot the entire bill for the generous pensions of public employees. In other words, he asked State public employees to do what private sector employees have done for a generation, contribute to their own retirement plan.
Next, he required that State employees pay a larger share of their health care premiums. The new law requires State employees to pay 12.6 percent of their health care premiums. By contrast, Federal employees pay at least 25 percent of their health care premiums.
To put these reforms in terms that his liberal detractors might appreciate, the Governor was just asking for a little shared sacrifice. Instead of pitching in, however, the State's public employees pitched a fit. Then, most significantly, Governor Walker reformed a collective bargaining system for State employees. Above all else, it was this decision that triggered the meltdown in Wisconsin last year and ultimately led to the recall.
Facing the possibility that a State might successfully limit union influence and excesses, national labor groups turned Wisconsin into the frontlines of labor agitation. I know some have tried to give me a reputation of being anti-union. That is ridiculous because I was raised in a union movement. I held a card for basically 10 years as I worked as a skilled tradesman in the construction industry.
But, in fact, I am not opposed to unionization if that is what employees truly want. I simply believe workers should be free to choose whether to unionize and do so in an environment that is free of coercion or intimidation.
Once unions are formed, I do not believe they should enjoy disproportionate bargaining power in their negotiations with management. That said, unions of public sector employees present a unique set of issues for taxpayers and voters. Public sector unions have inherent advantages in negotiations that private sector unions do not. Most notably, public sector unions use their substantial influence in State politics to elect the very officials with whom they will be negotiating their union contracts.
As the academic Dan DiSalvo and many others have recognized, when the Ford Motor Company negotiates with the American Auto Workers, it is an arm's length negotiation, with both parties having an interest in the ongoing success of the firm. Yet public employee unions effectively negotiate with themselves. There is no distance between them and the public officials they helped to elect and expect payback from.
Franklin Roosevelt understood that because public employee unions could elect their own boss, ``the process of collective bargaining, as usually understood, cannot be transplanted into the public service.''
George Meany, the first head of the AFL CIO, knew this relationship made it ``impossible to bargain collectively with the government.''
These critical points are lost on today's Democratic Party, which increasingly depends on the foot soldiers and largesse provided by these unions. As a result, we have an untenable situation, where public sector unions are, in effect, negotiating against the taxpayers. After all, their salaries and benefits come at the expense of the taxpayers.
The fiscal impact of these rigged negotiations is most evidence in States with the biggest budget problems. California faces a budget deficit of nearly $16 billion this year alone. It has $65 billion in unfunded liabilities in its teachers' pension system and $136 billion in unfunded liabilities for its largest city and county employee pension system.
The Illinois public employee pension system now has $83 billion in unfunded liabilities. So far, comprehensive efforts to reform these systems and bring down costs have been stymied for one simple reason: Politicians in those States do not have the courage of people such as Gov. Scott Walker.
Our folks here who support the unions ought to be happy this is happening because they themselves may not be able to accomplish this. The courageous Governors, such as Governor Walker, can, and in the end they are better off as Democrats because they have some reasonable approach toward some of these enormous problems that are affecting our States.
Instead of reforming their systems, these States have more often opted to raise taxes to attempt to eliminate the shortfalls. Yet most of the States with the highest unfunded liabilities already have higher-than-average tax rates.
Despite their many faults, private sector unions have a stake in the U.S. economy and the profitability of American
businesses. Indeed, they have a built-in incentive to ensure continued economic growth. True enough, they do not always act in accordance with that interest, which is probably the biggest reason why today less than 7 percent of private sector workers belong to a union. But, nevertheless, they need some level of continued growth in order to further their existence.
Public sector unions are an entirely different animal with a completely different set of interests. Unlike private sector businesses, State governments are not required to turn a profit. State officials are accountable to voters, but, unlike stockholders, most voters do not have the same expectations to see returns on their investments.
That being the case, public sector unions lack the same incentive to see their negotiating counterparts succeed. There are no forces limiting their incentive to simply maximize benefits for their membership, regardless of what it might cost their employers. In order to succeed, even the most ambitious and shrewd private sector union needs to account for its employer's ability to grow and expand.
Public sector unions are not subject to these sorts of limitations. That is probably why they have been so successful. Today, about 37 percent of government employees belong to a union, which is five times the unionization rate in the private sector. So it is easy to see why Big Labor pulled out all the stops to recall Governor Walker. Public sector unions are the future of the labor movement. Because of the long, steady decline of private sector unions, Big Labor knows it must maintain the strength of public sector unions in order to remain relevant. Yet at the same time, the States that employ them face incredibly difficult budgetary decisions in the coming years and I believe without the ability to be able to get them under control because of the controls of the major parties.
Let's be clear about what it would mean if public employee unions prevailed in these fights. It means that instead of reducing spending, States will have to raise taxes. It means that instead of eliminating government waste, States will have to maintain the status quo, and, ultimately, it means States will have to make a choice between paying their bills on the one hand and growing their economies on the other.
Going forward, it is absolutely vital that more States follow Wisconsin's example. States should not have to choose between educating their kids and paying the full freight of public employee pensions. During such difficult economic times, they should not have to raise taxes in order to keep their employees from having to pay a reasonable share of their own benefits. In short, States should have the ability to balance budgetary priorities without being thwarted at every turn by public employee unions that are only concerned with their own interests.
Last night and this morning, the pundits were in full gear, dissecting the results in Wisconsin and prognosticating about the election's long-term impact. To me, this exercise in democracy demonstrates two things. First, the failure of the unions and the national Democratic Party was not a failure of messaging or money. It was a failure of ideas.
Richard Weaver once wrote that ideas have consequences. That is absolutely true. The ideas that Governor Walker proposed were reasonable ones that addressed a critical fiscal situation without undermining essential services in his State. Second, it is clear the Democratic Party of Franklin Roosevelt, a party of blue-collar, private sector workers, has morphed into a party dominated by white-collar, public workers.
The American people, beginning with Wisconsin, are rejecting this Democratic Party and the priorities of its most influential stakeholders. The silent majority that gets up every day and goes to work in the private sector is losing its appetite for allowing public employee unions to dictate the Nation's fiscal policy.
There is one video going around of an opponent of Governor Walker's near tears and saying that democracy was denied tonight. Au contraire. Democracy is alive and well in Wisconsin and around the Nation, and the American people are going to have their say. Last night's results should serve as a reminder of the need to face our perilous fiscal situation honestly and squarely.
It should also remind us that the American people will not punish leaders who stand and do the right thing, even in the face of powerful and vengeful opposition.
My hope is that the experience in Wisconsin will be replicated around the country.
To borrow from one of Wisconsin's patron saints, Vince Lombardi, ``Winning is a habit. Unfortunately, so is losing.''
The unions have now had three bites at the apple since Governor Walker was first elected. Each time they have come up short. By prevailing, Governor Walker and Republicans in Wisconsin should stiffen the spines of conservatives who might have been previously unwilling to take on these public sector unions--public employee unions, if you will. By losing, those unions have shown themselves to be increasingly desperate and out of touch with the sentiments and concerns of everyday citizens and taxpayers.
Mr. President, I commend Governor Walker and his efforts to secure a prosperous future for the citizens of Wisconsin. His courage in the face of significant opposition is a model of statesmanship, and I look forward to working with him for many years to come.
Look, we all know the public sector unions have been out of control for a long time. Throughout the country, benefits paid to public employees have outpaced those in the private sector, and that includes Federal Government employees where the average pay is $80,000 a year compared to $50,000 for the private sector. We all know that is justified in the eyes of some because it is ``so expensive'' to live in Washington, DC, or nearby. Why is it that expensive? Because we have built the Federal Government at all costs, and we allow it to spend and spend rather than find more ways of living within our means.
There is a part of me that wishes we could move a number of these agencies out of Washington and put them out with the real people throughout our country who have to live within their means, and who don't have huge Washington, DC, salaries, which are huge to the average person, but not always to the people who work in this very expensive town. There they can mingle with the everyday people in this country who are paying the freight.
By the way, we all know that according to the Joint Committee on Taxation, the bottom 51 percent of all households don't pay any income tax or freight. There is a method in that madness, it seems to me. But it is the wrong method. Sooner or later we are all going to have to help pull the wagon and not just sit in the wagon and take advantage of everybody else. It ought to be done on a reasonable and decent basis.
But, once again, we all know the public sector unions are out of control. The States where they have the biggest problems are the States where the public sector unions have dominated their elected politicians over and over and over again, so the elected politicians are afraid to take them on, afraid to do the things that would straighten out their States, as Governor Walker has said.
Instead of finding a lot of fault with Governor Walker, if I were a Democrat, I would be saying: Thank God, somebody stood up. The fact is he has stood up, and he should be given credit for that not condemnation.
Frankly, I am very proud of the people of Wisconsin for standing up the way they did. I think other States are going to have to do that, too, or there are going to be problems like we have never seen before. We can name the States that have the problems. In almost every case they are blue States.
I yield the floor.
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