Sunday, July 11, 2010

PS427: Wisconsin candidates' cost-cutting plans don't add up

Journal Sentinel does a little checking up on savings claims.

Wisconsin candidates' cost-cutting plans don't add up - JSOnline

Why is it so hard to produce credible savings, growth, tax claims? This applies equally to both parties.


  1. The absence of a tough approach to the budget crisis by both sides of the political aisle are indicative of the nature of campaigning. To the leading candidates, Walker and Barrett, the costs of informing voters that they will lose services and be forced to possibly pay more in taxes puts the benefit of winning the election in doubt.

    For Democrats, the prospect of having to make cuts in BadgerCare, a program considered the crowing work of Governor Doyle, would seem disastrous at this point-especially when the federal health care bill was passed. On the GOP's side, ideology seems to be conflicting tremendously with reality. Neumann's plan to cut taxes at this point is ludicrous. Sacrificing even more in tax revenues would make slashing the budget even more difficult and would overburden essential programs like education.

    For the BadgerCare program, I wonder if more of an emphasis could be placed on preventative education. By this I mean that people involved with the Medicaid program should look into teaching people how to live healthier in order to reduce costs years down the road.

  2. The main challenge facing the production of accurate numbers is the candidates' assumptions that their legislation will run smoothly through the house and senate.
    In Barrett's case, incentivizing low-cost health care programs could save money, but BadgerCare is such a hot item already, elected officials won't be too willing to introduce more changes. The article doesn't mention Barrett's state job cutting proposals, or anything else from his $1.1 billion plan. It seems like they picked one thing that has some controversial aspects and tore into it.
    Of course Neumann's numbers will be called into question, simply because his plan is too general. By saying he will keep state spending 1% below the rate of inflation, he's saying almost nothing at all. Again, the biggest obstacle will be getting both sides of the aisle to agree to cost-cutting measure in every single program that reflects his 1% below inflation philosophy.
    Finally, for Walker, his government job cuts make sense, but his numbers will be refuted by unions that want to maintain these positions. Although, I think the personal contribution to pensions makes the most sense out of any of these proposals.
    In both republican's cases, to state flatly that you will be able to reduce taxes in a time of economic turmoil and statewide deficit is just plain stupid. It would be nice, yes, but wait four years from now when you're still trying to balance the budget and you haven't lowered taxes, and look at the backlash you'll face.
    The biggest challenge to accurate numbers is obviously the speculation from both sides - no one from either party will just agree to measures introduced by the next governor.

  3. Why is it so hard to make credible savings claims? I feel as though the answer is obvious. The candidates are running for an elected position, and while they may not always intentionally get their facts wrong, it's not too far fetched to think some fluffing won't occur. In times like these where our economy is suffering I agree with Dan that it is almost ludicrous to think that tax cuts will be a possibility. However, I believe it's statements about how much potential gain their plans will provide that the candidates use to bring some hope to the constituents. Essentially, candidates running for offices in these conditions know that the public wants to hear about the potential to make things better not all the downfalls. I would like to note I'm not saying the public shouldn't get the proper facts; just that candidates while running for office aren't going to talk about there being "no hope" for their cost-cutting plans. They must believe in what they will bring to the table as an elected official and if they slip in their numbers I'm sure another article will be there to correct them.

  4. Good point Dan. Tax cuts are always a tempting campaign promise but the reality is that if they are enacted, that means more spending cuts must take their fiscal place which would undoubtedly affect vital social programs like education. Doyle has already promised to cut some funding to the UW system. Walker's plan would only encourage more education hits.

  5. Cost cutting plans don’t add up! Surprise, surprise. In line with some of the earlier articles posted, it’s incredible to read how easy it is to blurt out plans for cost cutting and balancing the budget when reports of a growing deficit are coming in. Everyone running for office suddenly seems to have a plan to reduce our 2.5 billion dollar deficit , yet, when push comes to shove, every idea is flawed. It’s interesting to see how many of the candidates for governor refuse to detail their legislative “plans” to reduce the deficit. Are we supposed to take their “word”, vote them in, and then watch as our deficit swells? Also in line with earlier articles, the allusive WAF is always mentioned when savings are needed. Waste and Fraud are two words that are easy to throw out there, but as an earlier article mentioned it’s mostly an illusion of wasteful spending than a reality.

    I think that it’s so difficult to come up with an effective budget plan because of bi-partisan politics. Many of these plans sound good in theory, but when it comes to getting these plans passed in the house or senate, it’s mostly wishful thinking. While Barrett wants to encourage patients to choose the lower-cost Badgercare rather than the high cost Medicare, I’d imagine most patients see this as him trying to convince them to choose a health care of less quality. In addition, Neumann “assumes” that the economy is going to grow by 5% in the upcoming years, a pretty unrealistic assumption in this environment. Liberal or Conservative, budget plans lack credibility because more often than not they are built on loft goals or assumptions that just aren’t realistic in our political environment.

  6. Cost-cutting plans rarely ever add up...especially in a campaign where the race is heated and opponents are trying to push each other out of the potential seat. It is difficult to come up with a fantastic plan because a candidate is planning for a smooth-running legislature that will go along with all of his/her plans. They are also built on big goals that lack credibility because they aren't as detailed as some people may like them to be. However, it is a tactic that candidates use because the detailed pieces, such as property tax subsidies, education cuts, etc., could possibly cost a candidate an election. I also agree that budget plans on either side of the aisle may be unrealistic in our political environment.

    It is interesting to see and hear the arguments for each side's budget plans to reduce our state deficit. What is truly going to work? and what will make it worse? Obviously, neither side has a perfect plan and neither side is going to make everyone happy.

    I also think it is important to share the positive aspects with the public rather than just piles of negative aspects. It is much better to have an optimistic public looking forward to a better future for our state rather than to have a pessimistic public who believes that there is absolutely no hope. I see this on a regular basis in my office...the majority of our constituents only have negative comments about things going on in the state. Don't we have anything going for us?

  7. The problem with cost cutting strategies is that assume ideal conditions with all else equal. Their assumptions are based upon total cooperation from the legislature, as well as state agencies and the citizenry. If only we lived in a perfect world...

  8. This debate over tax cuts reminds me of the previous article we discussed about the New Jersey's governor battle between himself and the state legislature. Both sides are trying to achieve the same goal of removing the budget deficit, yet in different ways. The same can be said in the ways each candidate measures how well his tax plan can save Wisconsinites money.
    Walker's perspective is optimistic in that it hopes the economy will keep growing - though the Policy Research Institute found that there could still be a deficit if the economy does not improve. As such, Barrett's plan also neglect the regulations of the Federal government that the state must too follow.
    The projections that each candidate made can call for a different level of job creation, improvement, or no change. Also, if taxes are cut to what extent will it spur spending and growth - specifically given we are in a period of tight credit.
    Lastly, neither tax plan describes much in regards to jobs creation to aid in taxes.

  9. It is difficult to produce credible claims because our budget, in order to be balanced, needs to be a zero-sum game. In order to save money or allocate it to a department or issue, it needs to be taken away from somewhere. This will obviously be protested by whoever is affected negatively. Furthermore, politicians, when campaigning for office, will pledge to make positive changes, for example, Neumann's savings plans to accrue a surplus. But often times, when one looks beyond the superficial plan, it becomes obvious that it would take something as impossible as, "nixing hundreds of million of commitments already written into state law."

    Likewise, politicians have many issues and constituencies that affect their eventual policy decisions, and it's difficult for them to find a plausible solution that will please everyone. In the case of the Republican candidates for Governor, each wants to promise tax cuts, but this requires drastic cuts in spending to an unrealistic degree.

    In order to win an election, politicians can say and do whatever they want. They do not become accountable to the people until they are elected and in office. Most people do not understand the complex inner working of an economy or a budget. Legitimately fixing an economy is extremely difficult and likely requires the expertise of many specialists and a huge amount of information, in turn requiring a large number of people to process it. Thus, those at the head of a government are uniquely suited to succeed at this endeavor. But when a candidate eventually wins and finds himself in this position, he has gone from unaccountable to wholly accountable. He becomes stalemated by this, and must conceive of his plans realistically, which will likely isolate those who elected him under the guise of his unrealistic promises. This obviously makes a difficult decision between pleasing constituents and making lasting, positive changes that may irk those who elected him and seriously harm his chances at reelection.

  10. Every candidate running for office, trying to get elected by the people, has to please the people. Many officials say they will do something and then it takes much longer than expected to get it done, and perhaps is never fully completed. There are a lot of uncertainties in these savings plans and they depend on many other factors that these candidates cannot control. I do not think major tax cuts are possible in the near future, and we cannot be certain that it will solve all our problems. It seems that the proposed plans for BadgerCare will not solve the problem either. Major changes will need to be made and many people will be affected. No decisions can please everyone, and there is much uncertainty as to what will work and what will not. Cost-cutting plans hardly every add up.

  11. Just wondering people's opinion on the topic

    In times of recession, capital is injected into the economy to boost growth. Inversely, this means that in times of growth, spending and tax increases should be reined in. Would you agree or disagree with this statement?

  12. In times of growth, the government does not need to inject capital into the economy to boost growth, so that money can be directed elsewhere. I don't agree that spending should be reined in; when growth eventually leads to surplus, we possess the money to provide more extensive services and infrastructure. I do agree that tax increases should be reined in, but this is a slippery slope. As we have seen over the last 10 years, a surplus can easily and quickly be turned into a deficit. Clinton worked hard to balance the economy and put us at a relative advantage, and Bush took his predecessor's hard work and used it as an excuse to provide tax cuts for people who didn't need them, which contributed to the current monumental deficit.

    So it's necessary to find a balance. Conservatives will disagree with this, but I think it's necessary to find the ultimate utility between providing the greatest amount of services possible while allowing Americans to keep as much of their income as possible, all the while trying to ensure that growth holds up. This is clearly an ideal situation that is unlikely, particularly in the foreseeable future, but my point is that tax increases can only be reined in so far. In my opinion, it is the government's duty to provide services to the people. There will always be people in need who could benefit from greater government spending. Decreasing taxes, at least for the wealthy, is unfair to those who would benefit from that revenue.


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