April 14, 2011 / 9:41 PM / 7 years ago

Public employee fight comes to Congress

WASHINGTON (Reuters) - Political skirmishing in U.S. states about public employees spread to Washington on Thursday, as members of the House of Representatives came to verbal fisticuffs over collective bargaining and a pair of wealthy brothers.

The most visible figure in the battle over unions, Wisconsin Governor Scott Walker, told a hearing on states’ budget crises his recent policies to curb collective bargaining and change compensation have been “truly progressive.”

“While our idea may be a bold political move, it is a very modest request of our employees,” Walker said of asking state and local employees to contribute 5.8 percent of their pension and 12.6 percent of their health insurance premiums.

“Our reforms create the lowest structural deficit in recent history, ensuring our budget is stable for decades to come,” said Walker, a Republican with Tea Party support.

Vermont Governor Jim Shumlin testified that his state had closed its budget gaps by negotiating pay cuts and retirement changes with the unions.

“My point is: if you want to go after collective bargaining, and the fact that it helped build this country and that it helped build the middle class that is under assault in this recession, just come out and say it,” he said. “But if you want to balance your budget, you bring people in. You talk to them.”

States face total budget gaps of more than $100 billion for the fiscal year that starts for most in less than four months. They will have to slash spending, raise taxes or borrow to wipe out those gaps after nearly three years of taking drastic measures to shrink their shortfalls.

“We confirmed what leading economists are predicting...: that 2012 will be one of the most difficult budget years for states and municipalities on record,” said Rep. Patrick McHenry, a North Carolina Republican who held a series of hearings on the budget crisis.

For McHenry, the major budget threat is underfunded pensions -- public pension plans are currently unable to cover the costs of promises made to future retirees. Taxpayers will have to contribute more to public employees’ pensions, he said, throwing the states’ budgets off even more.

Lashing out at Walker, Ohio Democrat Dennis Kucinich cited a letter from Wisconsin’s non-partisan Legislative Fiscal Bureau that said changes to public employee collective bargaining would not impact Wisconsin’s budget gap.

“I don’t understand how this can continue to be characterized as a debate about state budget deficits,” he said, pressing Walker on how much money would be saved from various provisions, such as prohibiting employers from deducting union dues from paychecks.

“It obviously has no effect on the state’s budget.”

Last week, Wisconsin legislators approved a budget-closing measure that would restructure $165 million in debt and other fiscal elements. In March, they approved legislation that eliminated most collective bargaining rights for public sector workers, spawning massive protests. Some Democrat legislators briefly fled the state in the hopes of confounding the voting process.

Democratic Representatives on Thursday also questioned Walker about his ties to David and Charles Koch, asking him about donations he may have received from the conservative billionaires and other plans they may have crafted with him.

“I had 50,000 contributors,” Walker said. “I couldn’t tell you who they all are.”

Reporting by Lisa Lambert, additional reporting by David Bailey in Madison; Editing by Dan Grebler

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