“A Very Bad Boy”: Will Gov. Scott Walker Ever Come Clean On Wisconsin’s Budget Deficit?
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: http://youtu.be/vYFrt_jwdCk
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.
“Severe Conservative Syndrome”: An Incurable Malady Detached From Rationality
Mitt Romney has a gift for words — self-destructive words. On Friday he did it again, telling the Conservative Political Action Conference that he was a “severely conservative governor.”
As Molly Ball of The Atlantic pointed out, Mr. Romney “described conservatism as if it were a disease.” Indeed. Mark Liberman, a linguistics professor at the University of Pennsylvania, provided a list of words that most commonly follow the adverb “severely”; the top five, in frequency of use, are disabled, depressed, ill, limited and injured.
That’s clearly not what Mr. Romney meant to convey. Yet if you look at the race for the G.O.P. presidential nomination, you have to wonder whether it was a Freudian slip. For something has clearly gone very wrong with modern American conservatism.
Start with Rick Santorum, who, according to Public Policy Polling, is the clear current favorite among usual Republican primary voters, running 15 points ahead of Mr. Romney. Anyone with an Internet connection is aware that Mr. Santorum is best known for 2003 remarks about homosexuality, incest and bestiality. But his strangeness runs deeper than that.
For example, last year Mr. Santorum made a point of defending the medieval Crusades against the “American left who hates Christendom.” Historical issues aside (hey, what are a few massacres of infidels and Jews among friends?), what was this doing in a 21st-century campaign?
Nor is this only about sex and religion: he has also declared that climate change is a hoax, part of a “beautifully concocted scheme” on the part of “the left” to provide “an excuse for more government control of your life.” You may say that such conspiracy-theorizing is hardly unique to Mr. Santorum, but that’s the point: tinfoil hats have become a common, if not mandatory, G.O.P. fashion accessory.
Then there’s Ron Paul, who came in a strong second in Maine’s caucuses despite widespread publicity over such matters as the racist (and conspiracy-minded) newsletters published under his name in the 1990s and his declarations that both the Civil War and the Civil Rights Act were mistakes. Clearly, a large segment of his party’s base is comfortable with views one might have thought were on the extreme fringe.
Finally, there’s Mr. Romney, who will probably get the nomination despite his evident failure to make an emotional connection with, well, anyone. The truth, of course, is that he was not a “severely conservative” governor. His signature achievement was a health reform identical in all important respects to the national reform signed into law by President Obama four years later. And in a rational political world, his campaign would be centered on that achievement.
But Mr. Romney is seeking the Republican presidential nomination, and whatever his personal beliefs may really be — if, indeed, he believes anything other than that he should be president — he needs to win over primary voters who really are severely conservative in both his intended and unintended senses.
So he can’t run on his record in office. Nor was he trying very hard to run on his business career even before people began asking hard (and appropriate) questions about the nature of that career.
Instead, his stump speeches rely almost entirely on fantasies and fabrications designed to appeal to the delusions of the conservative base. No, President Obama isn’t someone who “began his presidency by apologizing for America,” as Mr. Romney declared, yet again, a week ago. But this “Four-Pinocchio Falsehood,” as the Washington Post Fact Checker puts it, is at the heart of the Romney campaign.
How did American conservatism end up so detached from, indeed at odds with, facts and rationality? For it was not always thus. After all, that health reform Mr. Romney wants us to forget followed a blueprint originally laid out at the Heritage Foundation!
My short answer is that the long-running con game of economic conservatives and the wealthy supporters they serve finally went bad. For decades the G.O.P. has won elections by appealing to social and racial divisions, only to turn after each victory to deregulation and tax cuts for the wealthy — a process that reached its epitome when George W. Bush won re-election by posing as America’s defender against gay married terrorists, then announced that he had a mandate to privatize Social Security.
Over time, however, this strategy created a base that really believed in all the hokum — and now the party elite has lost control.
The point is that today’s dismal G.O.P. field — is there anyone who doesn’t consider it dismal? — is no accident. Economic conservatives played a cynical game, and now they’re facing the blowback, a party that suffers from “severe” conservatism in the worst way. And the malady may take many years to cure.
By: Paul Krugman, Op-Ed Columnist, The New York Times, February 12, 2012
A “Rich Guy’s Dilemma”: Mitt Romney’s Big Tax Reveal
One of the stickier dilemmas awaiting Mitt Romney’s campaign is the intersection between his personal wealth and his economic program. Romney is a very rich guy who enjoys a low tax rate, which is a political problem. Combine that with his tax plan, which locks in the Bush tax cuts and then cuts taxes even more, you have a ready-made political theme for the Obama campaign to deploy against him should he win the nomination.
At the same time, Romney has not wrapped up the nomination. And conservative elites are saying that his plan doesn’t go far enough in cutting taxes for himself and his economic peers. So Romney is pulled between two competing forces — Republican supply-siders who want him to cut taxes for the rich even more, and general election swing voters who not only don’t want to cut taxes for the rich at all but think they need to go higher.
It’s pretty significant, then that Romney is planning to roll out an updated and (apparently) more detailed version of his tax proposal, via Jennifer Rubin:
Will he do more on taxes? “Yes,” [Romney] responds promptly. “We’ve talked about two immediate things we can do: Bring the corporate tax down from 35 percent to 25 percent, and eliminate cap-gains for people in the middle [class].” He said he would roll out the full tax reform plan “as soon as it gets through modeling.” Romney is not the candidate to charge forward without data. It doesn’t sound like a flat tax. He talks about “lowering rates and lowering deductions and exemptions.” (That sounds more akin to the plan suggested by Rep. Paul Ryan (R-Wis.).) He promises, with a not-so-subtle shot at his critics, “You can be sure I won’t be doing it to lower taxes on the top one percent. It will be pro-growth.”
But what does that mean exactly? Saying he won’t be “doing it to lower taxes on the top one percent” could mean two completely different things. It could mean he won’t be lowering taxes on the top one percent — perhaps he’ll keep the current effective tax rates on the top one percent steady. Or it could mean that he will be cutting taxes for the one percent, but he’ll just insist that he’s doing it because he cares about growth — the fact that people like himself will be getting a tax cut is merely the accidental byproduct of his pro-growth plan.
Which will it be? His choice will help signal how worried Romney really is about Rick Santorum’s polling surge. If Romney cuts taxes for the rich even more in his new plan than his old one, it shows he feels compelled to lock down the supply-siders against Santorum. If he cuts taxes for the rich less, then it shows he’s not taking Santorum all that seriously. And, of course, his decision will hold pretty important implications for the general election – either Romney will be narrowing the target profile he offers Obama or else he’ll be making it even wider.
By: Jonathan Chait, Daily Intel, February 13, 2012
“Jim DeMint’s Doormat: GOP Presidential Nominee Only Needs Enough Working Digits To Handle A Pen
The most quoted speech at CPAC this year was Mitt Romney’s, but my vote for the most significant goes to Grover Norquist’s. In his charmingly blunt way, Norquist articulated out loud a case for Mitt Romney that you hear only whispered by other major conservative leaders.
They have reconciled themselves to a Romney candidacy because they see Romney as essentially a weak and passive president who will concede leadership to congressional conservatives:
All we have to do is replace Obama. … We are not auditioning for fearless leader. We don’t need a president to tell us in what direction to go. We know what direction to go. We want the Ryan budget. … We just need a president to sign this stuff. We don’t need someone to think it up or design it. The leadership now for the modern conservative movement for the next 20 years will be coming out of the House and the Senate.
The requirement for president?
Pick a Republican with enough working digits to handle a pen to become president of the United States. This is a change for Republicans: the House and Senate doing the work with the president signing bills. His job is to be captain of the team, to sign the legislation that has already been prepared.
This is not a very complimentary assessment of Romney’s leadership. It’s also not a very realistic political program: congressional Republicans have a disapproval rating of about 75%. If Americans get the idea that a vote for Romney is a vote for the Ryan plan, Romney is more or less doomed.
To date, sad to say, Romney has worked hard to confirm this image of weakness.
Nobody wants a president who acts as the passive instrument of even generally popular groups like labor unions. (Did you know that—despite decades of declining popularity—unions still have an approval rating of 52%? I didn’t until I looked it up.)
But a candidate who appeases the most disliked people in national politics? That guy will command neither public affection nor respect.
Mitt Romney badly needs his Sister Souljah moment. Instead, he’s running as Jim DeMint’s doormat.
By: David Frum, The Daily Beast, February 13, 2012
Mitt Romney’s Problem With Conservatives: He’s Not Selling What They Want
The press has offered basically two explanations for Mitt Romney’s failure to win over conservative voters. The first is ideological: conservatives know that Romney was once a moderate, and they don’t consider his swing to the right sincere. The second is personal: whether because of his money, his faith, or his hair, average Republican voters just don’t relate to him.
There’s clearly something to both of these arguments, but they don’t fully explain Romney’s struggles. After all, moderates-turned-conservatives have won GOP nominations in the past. George H.W. Bush in 1988, Bob Dole in 1996, and John McCain in 2004 all won their party’s nomination despite histories of deep tension with the conservative movement. Steve Forbes, who had spent most of his life as a Rockefeller Republican, amassed so much conservative support in the run-up to the 2000 campaign that he briefly challenged George W. Bush from the right. Republicans also have rallied behind candidates from elite economic backgrounds (George H.W. Bush, George W. Bush) and candidates uncomfortable speaking about their faith (George H.W. Bush, Dole, McCain).
There’s a third explanation for Romney’s woes: he’s just not selling what conservative Republicans most want to buy. Going into this campaign, I suspect, Romney and his advisers figured it would be the perfect confluence of man and moment. Americans are obsessed with restoring jobs. Economic management, Romney likes to say, is his “wheelhouse.” As he put it last year, “That is what I know and what I do. I’ve had experience in turning things around that are going in the wrong direction.” From management consulting to the Olympics to the state of Massachusetts, Romney describes himself as a man who, through a combination of smarts, toughness, and pragmatism, nurses struggling enterprises back to health.
For the general election, it’s a pretty good shtick, which helps explain why Romney runs close to Obama in a head-to-head matchup. But while reviving the economy may be the issue that Americans care about most, it’s not the one that the Republican base cares about most. For conservative activists, the 2012 election isn’t fundamentally about jobs, it’s about freedom. The essential question is not how best to use government to restore economic growth. It is how best to keep government from destroying liberty.
When CBS News and The New York Times surveyed Tea Party supporters in 2010, for instance, they found that 45 percent described the movement’s goal as scaling back the federal government, compared with only 9 percent who described it as creating jobs. Asked what they were angriest about, 16 percent said the new health-care law, 14 percent said a government that doesn’t represent the people, 11 percent said government spending, and only 8 percent said unemployment and the economy. (This may be partly because, according to CBS and The Times, Tea Partiers are wealthier than other Americans and thus more insulated from the economic downturn.)
Obviously, conservatives see shrinking government and boosting the economy as interconnected: they’re convinced that if you do the former, the latter will follow. But when conservatives talk about limited government, it isn’t the prospect of enhanced economic growth that inspires them most, it’s the prospect of greater freedom. For a century now, American progressives have found the suggestion that boosting marginal tax rates or increasing anti-poverty programs threatens freedom to be downright baffling, but from Calvin Coolidge to Barry Goldwater to Glenn Beck, it’s been a core belief of the American right. And it has particular resonance in an era dominated by fears of national decline and after three years of a president who, more than his two Democratic predecessors, really has increased the federal government’s reach.
From Michele Bachmann to Ron Paul to Newt Gingrich to Rick Santorum, the candidates who have stirred passion on the right this presidential season have been those who have defined the election not as a struggle between economic stagnation and economic prosperity but between government tyranny and individual freedom. That’s why Obamacare is such a potent issue for grassroots conservatives; it also explains the right’s obsession with the Obama administration’s “war on religious liberty.” It’s why Gingrich gets such huge applause when he promises to abolish the Obama administration’s “czars.”
Listen to what Santorum said after he thumped Romney last week in Missouri. “People have asked me, you know, what is—what is the secret?” Santorum declared. “Why are you doing so well? Is it your jobs message? And, yes, we have a great jobs message … [but] the real message—the message that we’ve been taking across this country and here in Missouri—is a message of what’s at stake in this election … we have a president of the United States, as I mentioned, who’s someone who believes he knows better, that we need to accumulate more power in Washington, D.C., for the elite in our country to be able to govern you, because you are incapable of liberty, that you are incapable of freedom. That’s what this president believes. And I—and Americans—understand that there is a great, great deal at stake. If this president is reelected, and if we don’t have a nominee that can make this case and not be compromised on the biggest issues of the day, but can make the case to the American public that this is about the Founders’ freedom, this is about a country that believes in God-given rights and a Constitution that is limited to protect those rights.”
This is a bad general-election message. The Americans who decide presidential elections, especially in tough economic times, are pragmatic. They want candidates willing to do whatever it takes—no matter whose ideological ox is gored—to make the economic pain stop. It was FDR’s kitchen-sink pragmatism—along with his optimism and sense of urgency—that propelled him to victory over the doctrinaire Herbert Hoover. Bill Clinton beat George H.W. Bush in 1992 with the campaign motto, “It’s the economy, stupid.” Ronald Reagan won in 1980 in part because—unlike Goldwater 16 years earlier—he convinced Americans that when it came to popular government-spending programs, he would not let his conservative economic beliefs cause middle-class Americans any pain.
I suspect that Romney understands this. I’m sure he’d like to frame this campaign as a contest between a real-world, problem-solving businessman and a haughty academic who doesn’t understand what happens when ideas leave the blackboard. The problem is that at the very moment Romney wants to attack Obama for seeing the economy in abstract, ideological terms, his own party base is demanding that he do exactly the same thing.
Poor Mitt Romney. I actually think he’s interested in fixing the economy. But his party’s base is more interested in fighting the culture war by other means.
By: Peter Beinart, The Daily Beast, February 13, 2012
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