President Obama and GOP challenger Mitt Romney are in a spat over teachers and firefighters. Obama says Romney wants to lay them off. Romney says he doesn’t. Who’s right? Romney is — and he should recruit governors to explain to voters that the “teachers and firefighters” question isn’t as simple as it looks.
Last year, Obama unveiled the American Jobs Act, which he urged Congress to pass as a mini-stimulus. The act would “invest $35 billion to prevent layoffs of up to 280,000 teachers, while supporting the hiring of tens of thousands more and keeping cops and firefighters on the job,” according to the White House.
“Pass this jobs bill, and thousands of teachers in every state will go back to work,” Obama said. Because Romney opposes the bill, the Obama campaign says Romney doesn’t support local workers.
Romney hasn’t done a good job explaining his opposition, however. “Obama wants to hire more government workers,” he said. “He says we need more firemen, more policemen, more teachers. Did he not get the message of Wisconsin? … It’s time for us to cut back on government.”
That’s not the “message of Wisconsin.”
The message of Wisconsin is that mindless, one-size-fits-all federal stimulus efforts don’t prevent layoffs.
Think back to 2009, when Obama’s $787 billion stimulus sent about $200 billion to states, including $45 billion in direct education grants so that state and local governments could avoid teacher layoffs. That money bought time, which some states, including Wisconsin and New Jersey, used to address one of the leading causes of layoffs: not so much salaries, but employee pension and health benefits. These states pared back benefits so they could reduce worker costs — thus avoiding some job cuts.
As Wisconsin Gov. Scott Walker put it in a speech to the Manhattan Institute on Monday, “We avoided massive layoffs, which is something you wouldn’t pick up in the national media.” You fix state budgets, he said, “through managed reform. You don’t get there through random pink slips.”
Walker further noted that states that didn’t use their borrowed time to go the reform route — including neighboring Illinois — are in a tough situation now.
Illinois raised taxes rather than make big changes, and so it has to cut back on public services. “In Illinois, the governor has proposed closing 14 facilities … including a state mental health facility,” Walker said.
New Jersey Gov. Chris Christie put it more bluntly: “Please don’t send me any more money to hire more public employees. Please don’t,” he said to Obama via a D.C. speech. “I’ve got plenty as it is, and I don’t need any more, and they’re expensive,” even after benefits reforms.
States paying for public-sector workers who retire in their 50s can’t avoid big layoffs. There’s nothing the feds can do about that; state and local governments must act.
The other reason for layoffs is that state and local governments can’t pay for their workforces absent private-sector growth. Today, America’s private sector has fewer jobs than it did in December 2000 — more than half a million fewer. Yet state and local governments, even after 675,000 job cuts in the past four years, have 1.1 million more jobs than they did then.
The federal stimulus was supposed to tide state and local governments over until the economy recovered. But the economy hasn’t recovered — because it has problems, including too much private-sector debt, that neither presidential candidate wants to face.
These numbers — fewer private tax dollars to support more public workers — may work in a short recession. But they don’t work in a long economic stagnation. Romney should take his cues from what Walker and Christie are saying on the campaign trail, to which he could add: Without economic growth, even good governors can’t avoid layoffs.
Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal and contributor to PublicSectorInc.org.
