"The Tunnel - It is More Than Just the Tunnel"

Sydney M. Williams

Thought of the Day

“The Tunnel – It is More Than Just the Tunnel”

October 13, 2010

Forty-eight years ago President John F. Kennedy signed Executive Order 10988, an event which – perhaps consciously, perhaps not – changed the priorities of government. With that order, public employees were permitted to unionize. In 1937, President Roosevelt had said: “All government employees should recognize that collective bargaining, as usually understood, cannot be transplanted into public service.” George Meany, who served as the first president of the AFL-CIO, had argued in 1959 that it is “impossible to bargain collectively with government.” But union membership, as a percent of the working population, was already in decline and the leadership of the AFL-CIO sought new members. In 1960 union membership was 15.5 million, or 28.6% of the private workforce, a decline from 32% in the mid 1950s. Today, according to the Bureau of Labor Statistics, total union membership is almost identical, at 15.3 million, but represents only 12.3% of the workforce – 7.4 million private sector workers (7.2%) and 7.9 million public employees (37.4%). Public employees have been the saviour to unions, and have filled the coffers of Democratic campaign chests.

A consequence of the rise of public unions was a corresponding increase in benefits, particularly healthcare and retirement costs. It is hard to get accurate data for the states and local governments, but federal spending provides a guide. Congressional Budget Office records indicate that federal outlays for mandatory spending have risen from 33.8% of the budget in 1965 to 59.9% in 2005. The Complete Idiots Guide to Economics by Tom Gorman (you have to love the title!), in 2003, cited that entitlements comprised about 65% of the federal budget. Republican Senator Judd Gregg of New Hampshire, when Chairman of the Senate Budget Committee in 2005, stated: “Mandatory entitlement spending now represents a whopping 55% of all federal spending.” Whichever number is correct, the trend is obvious. The result is less money to spend on infrastructure projects so badly needed around the country. And that, then, leads to Governor Chris Christie’s decision to abort the proposed tunnel between New Jersey and New York. According to a study the Governor undertook, the original estimate of $8.7 billion looked more likely to be $11 billion and possibly $14 billion. For a state with a $29.4 billion budget and a $10.5 billion deficit, a few extra billion dollars means something, at least to the people – the taxpayers – if not to the politicians.

Unsurprisingly, Christie’s decision was attacked by the usual suspects. Bob Herbert, in a recent New York Times op-ed provided litanies of what we once were able to do and what we no longer can do. However, nowhere did he question the distorted priorities of states – in New Jersey, for example, the benefits to state and municipal employees exceed by 40% benefits paid to comparably employed workers in private industry; and the cost of those benefits are rising annually at 16%. Paul Krugman, also in the New York Times, argued that interest rates are low, implying that the state, already in arrears, should increase their borrowings; like Herbert, he bemoaned what he sees as a country without vision – without the capacity to foresee what value these big projects might provide.

But, again, and also like his fellow columnist, no mention is made of the fact that entitlements consume an increasingly large percentage of our resources, a consequence of a decision made forty-eight years ago – and, today, prevent us from spending on needed projects. The problem of entitlements did not suddenly appear. They have crept up silently and insidiously on an unsuspecting electorate and on politicians who seemingly chose to ignore the rumbling signs of an impending storm. These mandatory obligations loom ominously. They limit options. And Mr. Christie and a few others have realized there is no easy answer. The sad fact is there are things we cannot afford. There are times, as Governor Christie’s decision made clear, when the only answer is “no”. Perhaps the governor will be unable to bear the pressure and will change his mind. If he does, it will only serve to delay an inevitable day of reckoning; it won’t eliminate it.

David Brooks, in yesterday’s op-ed in the New York Times, wrote that we have “an immobile government that is desperately committed in all the wrong ways.” “The situation”, Mr. Brooks adds, has created “the Democratic Party’s epic failure.” All of us, including Mr. Christie, I am sure, would like to see the tunnel built, roads improved and bridges repaired, but a decision was made decades ago that no longer permits that type of spending. Decades ago, future obligations were small, and the future seemed far away. No one knew how big these obligations would become. But they are here and they are real.

There are those who want to continue as though nothing has changed; there are others who view themselves as stewards of the people’s money – not because they are nasty or insensitive, but because choices must be made.