Numbers are in: Walker accomplishes nothing; next stop, the White House
Quick question: Who has presided over a steeper reduction in the deficit he was handed when he took office several years ago, Scott Walker or Barack Obama?
This is an easy one, right? Scott Walker is a fierce deficit hawk who’s put Wisconsin on the comeback trail, while Barack Obama is a profligate, squishy-headed socialist who hands out food stamps like free hugs at Burning Man. Plus, Ebola.
But let’s take a look at the actual numbers.
In January of 2009, prior to Barack Obama’s inauguration, the Congressional Budget Office projected a $1.2 trillion deficit for the coming fiscal year. That was before the stimulus, before those shovel-ready projects got underway, before Obama loaded up one of those T-shirt cannons with free cell phones and birth control and drove through the mean streets of Chicago in his tricked-out presidential caravan. It was a real number, and it’s what George W. Bush left the new president after two wars (at least one of which was elective), some hefty upper-class tax cuts, and a devastating national recession. It ended up being $1.4 trillion before all was said and done, but the vast majority of that was due to the Bush recession and Bush policies.
Where do we stand today? We’re still running deficits — as we have every year since Bush turned Bill Clinton’s surplus into red ink — but the final budget report for fiscal year 2014 showed that the deficit had fallen to just $483 billion. Meanwhile, the deficit as a percent of GDP is now just 2.8%, which is lower than its average over the past 40 years (3.1%).
As Forbes contributor Stan Collender recently noted, this drop in the deficit has been nothing short of historic: “The only comparable period in U.S. history was immediately after World War II when the budget went from a 29 percent of GDP deficit in 1943 to small surpluses in 1947-49.”
So if Obama the human goodie bag presided over such a sharp decline in the deficit, Walker the deficit warrior must have really turned things around, right?
Um … not really.
When Walker took office, he claimed our state faced a structural deficit of $3.6 billion. The number was a bit squishy, considering that it included numerous department budget requests that were never likely to be approved in the first place. In other words, it was an inflated number, and whether you believe it was a more or less honest number or was deliberately inflated to give the new governor a casus belli for his war on public workers is up to you. But the truth is, the state’s deficit picture was never quite as dire as Walker claimed.
So what was the real number?
A clue is provided in a story written late last week by the Wisconsin State Journal’s Matthew DeFour. The report noted that the Walker administration is now projecting a $2.2 billion deficit heading into the 2015-17 biennium based on the amount that departmental requests exceed projected revenues. Big deal, right? Heading into Walker’s first term, the structural deficit was $3.6 billion, and $2.2 billion is a lot less than that.
Well, read past the headline of DeFour’s story and you’ll eventually get to this curious nugget: “The same report in 2010 prepared by Gov. Jim Doyle’s administration projected a $2.2 billion deficit for the 2011-13 budget ….”
So … the same, right?
At the same point in the budget process heading into new biennia, Gov. Doyle and Gov. Walker projected identical budget shortfalls. The big difference? Doyle’s deficit came following the worst economic downturn since the Great Depression while Walker’s follows a steady (if unspectacular) recovery during which the U.S. deficit has fallen precipitously (in fact, it’s now about a third of what it was when GWB left office).
Walker and his supporters love to talk about how the governor eliminated the massive deficit Doyle had left him, but it’s really easy to pile up a huge deficit when your state belongs to a country whose president has driven the economy into a tar pit. It’s harder to rack up a big deficit after the national economy has recovered.
But Walker has managed to do it, though chances are he’s not going to rail against the irresponsible deficit Scott Walker circa 2013 has left him.
Still not convinced?
Well, let’s take a look at the structural deficits the nonpartisan Legislative Fiscal Bureau — which for the most part doesn’t play politics with the numbers — projected for the biennia prior to Walker’s reign. These are reliable, apples-to-apples figures:
2001-03: $1.719 billion (the deficit Tommy Thompson left Scott McCallum)
2003-05: $2.867 billion (the deficit Scott McCallum left Jim Doyle)
2005-07: $1.546 billion (Doyle to Doyle)
2007-09: $1.499 billion (Doyle to Doyle)
2009-11: $1.682 billion (Doyle to Doyle)
2011-13: $2.511 billion (Doyle to Walker)
(To take a look at the numbers yourself, check out the chart accompanying this column.)
More recently, in early September, the Legislative Fiscal Bureau projected a structural deficit of $1.766 billion, which is higher than every structural deficit Doyle presided over, with the exception of the $2.511 billion deficit Doyle left Walker (as a result of the cratered Bush economy).
And the LFB’s number was an early estimate. It could very well go higher by the time Walker’s first term blurs into his second. (In fact, this WKOW report, released on Friday, suggests that the deficit could indeed balloon because revenues are not coming in at the pace the Walker administration estimated when it arrived at its figures.)
What’s not in dispute is that even by the Walker administration’s own estimate, the deficit has not been eliminated — not even close — despite the governor’s claims to the contrary during his campaign against Mary Burke. (Of course, it’s worth noting here that neither Walker nor Doyle actually started any biennium with an unbalanced budget, as our constitution requires that the state budget be balanced. The question is, is it possible to balance it without scapegoating a large segment of the workforce?)
So what has the governor accomplished? He hasn’t turned our state into an economic powerhouse that’s outpacing our neighbors or the rest of the nation in job creation. He hasn’t made our state a better place for public workers. And his biggest claim to fame — turning a deep deficit into a surplus — is based on smoke and mirrors.
Last week, Politico reported that Scott Walker is “taking active steps” toward a presidential campaign. Apparently, he wants to do for the country what he’s done so far for Wisconsin.
Frankly, he should aim higher.
Click here to sign up for the free IB ezine — your twice-weekly resource for local business news, analysis, voices, and the names you need to know. If you are not already a subscriber to In Business magazine, be sure to sign up for our monthly print edition here.