Scott Walker is running a television commercial extolling the crowning achievement of his short time in office —the balancing of the Wisconsin state budget and the wiping out of the $3.2 billion deficit he inherited. Check this out:
Even the harshest critic of the Wisconsin governor would have to acknowledge that this is some pretty impressive work. For a governor to balance his state’s budget in these tough times—even if it is done by making Draconian cuts to health and education—is a noteworthy accomplishment.
Of course, such admiration would only be required if the Governor had, in truth, actually succeeded in the manner he suggests.Unfortunately, it turns out that Scott Walker is being a very bad boy…again.
In fact, we now know that the Governor is either being untruthful with the good people of Wisconsin on the whole ‘I balanced the budget and wiped out the deficit’ thing or he’s been, shall we say, stretching the truth when speaking to Uncle Sam on the same topic.
As we all know, it’s not nice to lie to your Uncle Sam.
In a letter sent by Mike Huebsch, Walker’s Administration Secretary, to the U.S. Department of Health & Human Services just two months ago, Huebsch disclosed that the state of Wisconsin would have an ‘undisclosed deficit’ from January, 2012 through June, 2013.
But didn’t we all just watch the video where Walker extolls his great victory in cleaning up the state’s multibillion dollar deficit?
If you’re confused, get use to it as it only gets worse.
This latest episode in the “Adventures of Scott In Dairyland” it is the perfect expression of everything we have come to expect from Governor Walker—half-truths designed to mislead, broken campaign promises, and a predilection to sneak through the back door when going in via the front would result in way too much unwanted exposure.
Let’s begin with why Walker would want to go on record with his letter to HHS claiming a deficit while, at the same time, campaigning on a message that tells a very different story.
Federal law allows a state to remove people from the state’s Medicaid rolls only in the circumstance where the state can show that it is suffering deficits. As Walker is planning to make even more cuts to Wisconsin’s health budgets—cuts he tells us he is attempting to accomplish without forcing people out of this critical health program—the Governor wants to keep his options open. To do that, it was necessary for the Walker Administration to tell HHS that his state is running a deficit while attempting, at the same time, to convince voters of the precise opposite—all so he can hold onto the opportunity to place more than 50,000 Wisconsinites in danger of losing their only access to health care.
Perfectly understandable, yes? After all, what’s a governor to do when he wants to take health care away from thousands while trying to convince those same people to vote for him in a recall election?
It’s not easy being Scott.
Still, we are left to wonder whether Walker is lying to the people of Wisconsin or fibbing to the federal government? It pretty much has to be one or the other.
The answer is dependent on, of all things, accounting.
The Milwaukee Journal Sentinel does a good job of laying it out-
In June, Walker and Republican lawmakers passed a balanced budget according to the measure that is always used for state budgets – cash accounting. That means essentially that the state will have cash left in its main account – an estimated balance of $68 million – when the budget ends on June 30, 2013.
That’s the measure that state officials use for budgets and the one Walker has repeatedly touted in statements when he says he eliminated a $3 billion budget deficit on a cash accounting basis.”
There are, essentially, two accepted methods of accounting. There is the “cash method”— the one utilized by the Wisconsin legislature and Gov. Walker in creating their balanced budget—which accounts for how much money is in the bank at the end of the fiscal year after bills have been paid. If there remains cash in the bank account, then there is no deficit.
Of course, this approach does not take into account the reality that upcoming obligations are not only going to wipe out that cash, but create a deficit when those obligations exceed what is in the bank. As a result, cash accounting rarely presents a true picture of an organization’s finances—which is precisely why every public company in America, along with most city and country units of government, are required to use the GAAP method.
GAAP (the acronym for Generally Accepted Accounting Practices) accounting takes into consideration the money expected to come in and the money committed to going out in order to work out where an organization actually stands.
If you employ the cash method being utilized by Governor Walker, were you to have $100 in the bank at the end of the year, after all the invoices that came in during December have been paid, you can credibly claim that you have no deficit. Never mind that you know full well that a credit card bill is coming in January for the $5,000 you spent Christmas shopping during the month of December and that there won’t be anywhere near enough cash in your bank account to pay that bill when it arrives. That is what we call a deficit. If you are using GAAP, you are required to account for that $5,000 obligation in the month you rack up the obligation. Thus, what is a $100 surplus if you are using cash accounting becomes a $4900 deficit if you are using the more precise GAAP accounting.
What Walker is doing here is using the cash method of accounting to form the basis of his claims as stated in his advertisement while using GAAP accounting when making his claim to the Feds.
That’s a no-no in anybody’s version of the real world—or should I say anybody but Scott Walker. While the rest of us are required to live and die by the accounting method we choose, Governor Walker, apparently, doesn’t believe that this applies to him because …well, because Governor Walker is ‘special’. He is, after all, on a first name basis with the Koch Brothers.
To be fair, politicians have long used the more favorable cash method of accounting to lay claim to better financial results, including Walker’s predecessor, Democrat Governor Jim Doyle. However, because this is so dishonest a way of putting forth the realities of a state’s financial condition, people have long been disturbed by the practice—people like ….Scott Walker?
It seems that while Governor Walker now chooses to use cash basis accounting rather than a more honest representation of the state’s finances—at least when reporting his results to the people of Wisconsin—Candidate Walker saw it very differently. In fact, in 2010, Walker vigorously campaigned on the importance of ridding the state of this distorted method of accounting, going so far as to state on his campaign website that he would “Require the use of generally accepted accounting principles (GAAP) to balance every state budget, just as we require every local government and school district to do.”
How quickly he forgets—except when it serves his purposes to suddenly convert to GAAP when he wants something from the federal government.
There is really no logical way around the conclusion that Governor Walker has, at the very least, (a) broken an important campaign promise within months of making that promise, and (b) lied to either the people of Wisconsin or the government of the United States.
The good news is that Governor’s Walker’s spokesman, Cullen Werwie, doesn’t see a big deal here. He tells us that this is all “…nothing more than what we’ve been saying all along.”
That’s good enough for me. I mean, it’s not like this is the Cullen Werwie who required a grant of immunity from prosecution before he would cooperate with prosecutors in the John Doe investigation into illegal electioneering that threatens to bring down the Walker Administration before we even get to the recall vote.
Oh wait….it seems that the governor’s chief spokesman is the very same Cullen Werwie who required a grant of immunity to avoid prosecution.
Say what you will about the folks running things up in Madison, Wisconsin, but you certainly can’t say they aren’t colorful.
The state added 12,900 jobs in the private sector but lost 3,400 government jobs in June, according to seasonally adjusted numbers released by the state Department of Workforce Development. The net gain of 9,500 jobs accounts for more than half the 18,000 net jobs created across the nation during the month.
The governor credited the state’s numbers to “a rebirth of tourism” following broad efforts to publicize Wisconsin’s state fairs, ethnic festivals and sporting events.
“Tourism is more than a $12 billion industry in the state of Wisconsin,” he told reporters in Milwaukee. “This is about putting people to work.”
He said he didn’t have details on which specific industries gained jobs. However, the Department of Workforce Development confirmed that almost half the private-sector growth was in the leisure and hospitality industry. There were 6,200 jobs created in that sector last month, and 3,300 more jobs than in June of last year.
A reporter asked whether the new jobs were seasonal and would be gone in several months. Walker replied that some were summer jobs but that an unspecified number would carry over into subsequent months.
“You certainly have a summer blitz when it comes to lakes and our other attractions, but you come back in the fall for hunting and you come back in the winter for snowmobiling and skiing,” he said.
When asked if the new jobs pay livable wages Walker said the job numbers released Thursday were sorted only by industry, not income. He added that his focus has always been to attract well-paying jobs.
Walker was joined at his news conference by Tourism Secretary Stephanie Klett. She said Walker’s budget increased the department’s funding by 20 percent, allocating an additional $2.5 million toward attracting visitors from other states.
“We ran a $3 million marketing campaign this summer,” she said, “and I think today with this announcement we are seeing the results in a big way.”
She said some of the new jobs were year-round positions at popular resorts.
Even though Wisconsin added nearly 10,000 jobs in June, the state’s unemployment rate actually nudged upward for the month to 7.6 percent, up 0.2 percentage points from the previous month. That’s because the job numbers and employment numbers come from two separate surveys, DWD spokesman John Dipko said in an email.
The jobs number comes from workplace data, while the unemployment rate is based on a survey of households, he said.
Unemployment figures encompass Wisconsin residents who are available for work and actively seeking jobs.
The state Democratic party said the preliminary job numbers look promising, but party chairman Mike Tate said it is important to know specifically what types of jobs were being created.
“Will these jobs support Wisconsin families or will they bolster the profits of corporations that benefit from the downward pressure on wages and benefits that comes at the hands of Scott Walker’s attack on collective bargaining?” he said in a statement.
The state’s unemployment rate has hovered around 7.4 percent for the first five months of the year. The state figure generally has been about 1.5 percentage points better than the national rate. That trend continued last month as the U.S. unemployment rate rose 0.1 percentage points to 9.2 percent.
By: Dinesh Ramde, Associated Press, July 22, 2o11
Where are the jobs, Gov. Walker?
Scott Walker, the chief executive of Wisconsin, is riding a wave of triumph. The state Supreme Court just upheld his famous crusade to strip collective bargaining rights from public workers. The state legislature just voted, along party lines, to approve his 2012 budget reordering the state’s finances to his conservative tastes.
On Monday morning, Walker stopped by the U.S. Chamber of Commerce to participate in a roundtable discussion about “what works and what doesn’t” in job creation.
Walker regaled the assembled business leaders and governors with tales of his job-creating acumen. He boasted about passing tort reform, tax cuts, a “major regulatory reform” and his celebrated fight against the public-sector unions. “That’s powerful for job creators out there,” he said.
How powerful? “Since the beginning of the year in Wisconsin we’ve seen 25,000 new jobs,” Walker reported.
Sorry, governor, but that’s not very powerful.
That’s an increase of seven-tenths of one percent in the workforce — not much better than the anemic nationwide growth in nonfarm payrolls to 131,043,000 in May from 130,328,000 in January.
This doesn’t mean Walker’s policies have failed; by his own account, the benefits could take years to materialize. But it does suggest that the conservatives criticizing the Obama administration’s handling of the economy don’t have a silver bullet of their own. Walker, who has large Republican majorities in the Wisconsin legislature, experimented with a long conservative wish-list, but the state hasn’t been a standout in job creation during his six-month tenure.
The truth is that there’s not much more that government can do to boost jobs in the short term. That’s up to the private sector now. Corporate America has recovered so well that profits have been at or near record levels of an annualized $1.7 trillion in the last two quarters – but businesses have yet to spend their piles of cash.
Instead, flush CEOs are demanding still more government spending. This was a theme of Monday’s session at the Chamber, where 23 men and one woman sat around a u-shaped table and listened to Chamber president Tom Donohue describe states as “laboratories of democracy,” where businesses are more likely to find “common sense solutions, innovations, experimentations, bipartisanship.”
Walker, whose tenure has made Wisconsin more of a laboratory of theocracy, clenched his jaw at the mention of bipartisanship. “The very first day I was elected,” he said when his turn came, “I put up a sign that said, ‘Wisconsin is open for business.’” He waved a bumper sticker for the Chamber crowd with that same message. “I called the legislature into a special session based solely on jobs.”
That led to the fight over collective bargaining, the fleeing of Democratic legislators across state lines, and huge protests in Madison. “We got a little more attention than most,” he said.
The attention continued on Monday. Delaware Gov. Jack Markell, one of two Democrats on the panel, said he “took a different approach” than Walker did: “I invited the unions to the table.” Markell said that the cuts he got from the unions exceeded his target by 30 percent, without creating statewide bitterness.
The other Democrat, Colorado Gov. John Hickenlooper, implicitly rebuked Walker when he said “with a Republican House and Democratic Senate we passed our budget with at least 75 percent in both houses.”
In terms of job-creation, neither Democrat’s approach has worked any better than Walker’s. Colorado added 9,000 non-farm jobs this year and Delaware has been flat. Iowa, represented on the panel by Republican Gov. Terry Branstad, added 12,000. Virginia, represented by Gov. Bob McDonnell, added 22,000.
The biggest job creator of the six, Gov. Rick Scott (R-Fla.), boasted that his tax cuts, deregulation and tort reform enabled him to cut “unemployment every month since I came into office, and last month our job creation was more than the entire rest of the country.” That’s nice, but even Scott’s job growth amounts to just 1 percent of the state’s workforce, and Florida’s unemployment is among the highest in the country.
Eventually, the governors – like President Obama – will have more to show for their job-creation policies. But for now, they’ll have to settle for baby steps. Walker told the Chamber that Wisconsin moved up 17 places in Chief Executive magazine’s annual ranking. “Last year we were 41,” he said. “This year, we went up to No. 24.”
If only those happy CEOs would start hiring.
By: Dana Milbank, Opinion Writer, The Washington Post, June 20, 2011
Walkerville Activists Stand Strong: Peaceful Protest At Wisconsin Department Of Administration Offices
Dozens of Walkerville activists marched from the Wisconsin state Capitol to DOA Secretary Mike Huebsch’s offices at noon on Wednesday, June 15, to protest the former GOP state rep’s archaic Capitol security measures.
CMD learned while examining the drafting files at the Legislative Reference Bureau that Huebsch’s DOA gave the drafting orders for the collective bargaining section of the budget bill. Huebsch’s top political appointee, Cynthia Archer, served as a top aide to Scott Walker when he was Milwaukee County Executive.
The group roared “Who’s House? Our House!” as they entered the Department of Administration building on East Wilson Street. Protesters weren’t able to schedule a meeting with Huebsch – considered by many to be Governor Scott Walker’s top ally, and the architect of his 2011-2012 budget – but still managed to hang “unWANTED: Mike Huebsch” signs in his personal office and throughout the building.
Pilar Schiavo, an activist with the People’s Rights Campaign and Nurses United, led the peaceful procession. She stressed the danger of overlooking Huebsch’s involvement with Governor Walker’s anti-middle class agenda, and the need to repel his efforts to crush “the public’s right to assemble.”
“We feel like it’s important to pull Mike Huebsch out of the shadows. He’s really been responsible for the shutting down democracy within the capitol, and he’s had his hand in creating the budget,” said Schiavo.
One protestor taped an “unWANTED” sign, which read “Suspect is believed to be dangerous and armed with the unlawful eviction of The People from the Capitol” to Huebsch’s desk chair. With protestors still inside the building, a DOA receptionist began taking down the posters, citing their “offensive” nature.
The mood remained hopeful despite yesterday’s announcement from the Supreme Court legalizing Governor Walker’s collective bargaining legislation. Schiavo reminded the crowd that in spite of recent setbacks, victory looms on the horizon for the Wisconsin workers’ rights movement.
“People need to remember that this is a long fight, and that we’ve been successful already. We were able to hold that law for months. This is a long term struggle – the Walker agenda has been in the works for 30 years.”
By: Eric Carlson, Center for Media and Democracy, June 15, 2011