David Michael Miller
Wisconsin is left in the dust when it comes to federal spending. If the state had just reached the national per capita average, it would have meant a $9.9 billion boost to the Wisconsin economy in 2008. The UW-Madison is ranked second in the nation for
Todd Berry blames it on our genes. The president of the Wisconsin Taxpayers Alliance suggests the state's chronic indifference to federal help is buried deep within our political DNA.
The Yankees who first settled Wisconsin, he says, "were suspicious of large, autocratic central government." The Germans and Scandinavians who followed weren't much different: They were "independent, hardworking, self-reliant...and suspicious again of a distant central government."
I think the late Sen. Bill Proxmire - not genetics - is mostly to blame. But however you apportion responsibility, the legacy is the same: Wisconsin does wretchedly as a recipient of federal spending.
There are lots of bad measures to point out, but the key one is this: We rank 48th among the 50 states in federal aid, saved from last place only by Nevada and Utah.
This dreadful performance has a real-life impact on Wisconsin's economic well-being. It means fewer jobs, poorer public services and a heavier state and local tax burden.
Federal spending in Wisconsin came to $7,132 per person in fiscal 2008, according to federal data newly analyzed by the Northeast-Midwest Institute. The national average was $8,904 per person - a $1,772 difference.
Do the math. Wisconsin's population numbered about 5.6 million in 2008. Multiply each person by that shortfall and you come to $9.9 billion. That's how much more money would have sloshed around the state economy if we had just hit the average for federal spending in fiscal 2008. Perish the thought we should score high, like Alaskans and Virginians. (See chart, this page.)
Worse, in fiscal 2007, Wisconsin residents paid more than $5.6 billion in taxes to Washington than we got back in federal spending. The experts say this makes Wisconsin a "donor" state in the vast flow of federal tax revenue. That's a polite way of saying we're chumps.
A prime beneficiary of our chumphood has been the Sun Belt, that balmy swath running from Southern California through Texas to the southeast up to Virginia. In the 1970s, observers began to connect the rise of the Sun Belt with three decades of heavy federal spending on military and infrastructure. They noted that long-serving Dixie congressmen controlled the key appropriations committees to the immense benefit of their constituents.
The New York Times reported that, by 1976, "perhaps the most striking factor" in the Sun Belt emergence was its ability "to attract far more money from federal coffers than its taxpayers contribute."
There was nothing hedged in reporter Wayne King's assessment: "For three decades, the Sun Belt has been first in line at the pork barrel, amassing vast sums for defense installations, space exploration and technological development." It seems like peanuts now, but in 1974, the region collected $13 billion more from Washington than it paid in federal taxes.
Huntsville was cited as a prime beneficiary of federal largesse. The once sleepy northern Alabama town got cheap electricity and flood control when the federal government dammed the wild Tennessee River. An extraordinary number of military installations followed, as well as the Marshall Space Flight center. Major defense contractors like Rockwell and Lockheed settled in.
Colin Gordon, a historian at the University of Iowa, provides the backstory.
"Public spending done right can fill a hole that no one else will fill in community development," he says. "Look at the construction of a big dam in the Tennessee Valley. Not only did it provide construction jobs in the short term that the private sector was not about to create, but in the long term it provided the foundation for a more modern economy."
Gordon, who's written a book on the New Deal's relationship with the business community, adds, "For me, the fundamental irony of the postwar political culture is this sort of frontier 'leave-me-alone' mentality that comes out of Sun Belt politics. Well, it's a region that's entirely built on the back of federal spending."
Les Aspin, a young, ambitious congressman who represented Wisconsin's ailing "Rust Belt" First District, saw how the game was played. He served in Congress from 1971 to 1993 and rose to become chair of the powerful House Armed Services Committee. His former aide, Charles Gonzales, says Aspin had "a real interest in getting federal dollars to Wisconsin." Indeed, Aspin played a crucial role in securing a federal grant that saved a downtown Madison revitalization project in 1980.
But in the grand sweep of Wisconsin politics, Aspin was an outlier. An exception to the rule. Our pols tend to throw up their hands at the mention of federal spending: Pork? You want us to dine at the trough of the taxpayers? Please! How unbecoming!
Insiders offer a matter-of-fact explanation for Wisconsin's dearth of federal spending. The state doesn't have any big military bases, so we don't get all those military salaries and big defense contracts. And those big federal regional offices wind up in Chicago and not in Milwaukee. So, of course, we don't get a lot of bucks from Uncle Sam. End of story.
There's some truth to this, to be sure. But another and perhaps greater factor is the state's political culture and its dysfunctional mix of high-minded liberals and doctrinaire conservatives. More often than not, neither has much interest in playing the hard, smart game of federal funding.
Todd Berry's chromosomal theory comes in play here. Add in the lingering "good government" ethos of the Progressives, especially in Dane County, and you get what you got: Wisconsin's almost biblical injunction against the partaking of "pork."
"We're better than that," says John Nichols, the liberal columnist for The Capital Times, who adds that Wisconsin politicians "go to Washington to be leaders, not to hunt for nickels and dimes."
No one understood the Badger State zeitgeist better than Bill Proxmire, whose long senatorial run was marked by a temperance crusade against government waste. Ever since, Wisconsin Democrats and Republicans alike (take a bow, Jim Sensenbrenner, Paul Ryan, Russ Feingold, Jerry Kleczka, John Norquist, Bob Kastenmeier, et al.) have anointed themselves with magical oils to protect the state from the corrupting influence of federal dollars.
We had a classic demonstration of the mindset early this spring, when Milwaukee County Executive Scott Walker, now a GOP gubernatorial candidate, noisily protested that he didn't want any federal stimulus money. Too many strings, too many catches. It was a trap, he warned, that would mire the taxpayers in future spending.
Similarly, this past March, ideological antagonists Ryan and Feingold joined to announce their support for legislation to give the president a line-item veto to strike earmarks from budget bills.
Such displays of fiscal rectitude are a Wisconsin tradition. And usually just malarkey. To give one example, congressional earmarks - those allocations "marked" by individual lawmakers for inclusion in an executive-branch budget bill - are hardly the problem that critics claim.
Sure, the excesses of pork-hounds like Alaska Sen. Ted Stevens and Pennsylvania Rep. John Murtha are cringe-worthy. A Bridge to Nowhere, anyone? But as Wisconsin Technology Council president Tom Still pointed out in an online column, earmarks account for less than 1% of federal spending; their use dates to the very founding of the Republic; and often the money is spent on good, local projects.
Why wouldn't we want our lawmakers to seek earmarks that would benefit Wisconsin? Why shouldn't they help their districts compete for grants?
"If you're 48th among 50 states, you want to get closer to the national average," says Tom Hefty, the retired head of Blue Cross-Blue Shield United of Wisconsin. "That's not pork. That's equity."
A Madison example underscores the point. In the late 1970s and early 1980s, sky-high interest rates were snuffing out early efforts to revive a downtown laid low by the rapid suburbanization of retail and housing.
Tellingly, it was Aspin - and not Madison's revered progressive hero in Congress, Bob Kastenmeier - who went to bat for the city with the federal bureaucrats.
At stake was Capitol Centre, probably the most complicated redevelopment project the city has undertaken. Targeted for two underutilized blocks of surface parking, the Capitol Centre proposal mixed subsidized senior housing, market-rate apartments, a parking ramp, commercial space and a new senior center.
The financing was a patchwork of state- and city-issued bonds, developer equity, tax increment financing and federal block grants. But even that was not enough. The city needed money from a new federal program - Urban Development Action Grants (UDAG) - aimed at helping "severely distressed cities and urbanized counties," as the U.S. Department of Housing and Urban Development put it. The city's consultant warned that Madison was only "marginally eligible" because of its middle-class demographics.
Mayor Joel Skornicka went to Washington with his top aides to see what could be done. At Kastenmeier's office, "they gave us the phone number for HUD," he says with a laugh. Skornicka next turned to Aspin's office for help and got an altogether different response. Aspin put his aide Gonzales on the job to help Madison.
Gonzales, now an executive with the American Transmission Co., recalls that the UDAG program was newly created by President Jimmy Carter, and that Aspin wanted to move quickly before the administrative rules for reviewing applications were established. "We helped them figure out what the grant criteria should be," he says.
Madison and Milwaukee quickly filed applications and were among the first cities to receive money. As a result, Capitol Centre got built. Seniors got affordable housing and their own meeting place. Capitol Foods became the first downtown grocery since Kroger's was burned to the ground during the 1970 Vietnam War disturbances. The new Civic Center got a parking ramp. One hundred and fifty new market-rate apartment units were built. This was big stuff in a dark time.
"In the next 10 years, not much happened downtown in terms of housing," says Lon Sprecher, a Skornicka aide who is now president of the Dean Health Plan. "To be honest, Capitol Centre wouldn't have happened without Charlie's call to HUD at Les' behest."
Gonzales says other congressmen "think sending a letter is enough." Not Aspin. "We always devoted a lot of staff time to bringing money back to Wisconsin," he says. "We were aggressive about it."
Aspin's approach was the antithesis of Bill Proxmire's career-long war on federal spending. Guess who's the Wisconsin legend?
Proxmire, who served in the U.S. Senate for 32 years before retiring in 1989, channeled all the contradictory impulses of Wisconsin politics. Immensely popular with the voters, the Democrat mixed liberal populism and fiscal conservatism. His 1982 Republican challenger, Scott McCallum, actually ran to the left of him on the abortion and spending issues. (Proxmire creamed him on Election Day.)
Proxmire spent exactly $177.75 on his reelection, refusing all campaign contributions. Instead, he shook thousand of hands at football games, civic celebrations and plant gates. That was Bill Proxmire, a Wisconsin original.
Famously disciplined throughout his career, he gave 3,211 speeches favoring the U.N. genocide treaty before his Senate colleagues finally passed it. And he waged relentless war against what he considered unnecessary federal spending - everything from $400 hammers to silly-sounding social-science studies to wildly over-budget Pentagon projects.
A PR genius, Proxmire issued monthly "Golden Fleece" awards attacking "the biggest, most ridiculous or most ironic example of government spending or waste." He also worked to pass landmark consumer-protection legislation. But when all was said and done, Proxmire was a bit of a fraud himself.
Many of his memorable Golden Fleece awards were know-nothing attacks on science, particularly the emerging field of evolutionary psychology. He settled out of court when an aggrieved researcher sued him for $6 million for libel and defamation of character. In 1975, the UW-Madison Faculty Senate voted 84-1 to condemn Proxmire for his "irresponsible and inaccurate attacks" on a colleague.
"He was a publicity hound who never contributed to the improvement of government. Instead he made cheap shots against it," says Mordecai Lee, UW-Milwaukee political science professor and a former state lawmaker. "If anything, Proxmire was the precursor to today's empty suits who dominate politics: [Be] smooth and say anything to stay popular."
Skornicka, who describes himself as a friend of the Proxmire family, says the senator never figured in Madison's strategizing to secure that federal grant. "Bill was very hard to approach on things like that."
Yup. That's the problem.
Doctrinaire conservatives may deny it, but federal spending can be a catalyst for economic growth. Liberals may be too high-minded to care. But how can both ignore the hemorrhaging of Wisconsin tax dollars to other states, especially in these bleak economic times?
Reality is that the Wisconsin economy is faltering. As the Center for Wisconsin Strategy has pointed out, state per-capita income is $2,500 behind the national average. The gap is even larger with our immediate neighbors: Wisconsin's per capita income of $36,272 is nearly 15% less than Minnesota's $41,105 and Illinois' $41,012. We do top Iowa, but as Tom Hefty points out, Iowa's job creation and economic growth far outpace Wisconsin's sluggish performance.
All of which makes it stunningly unhelpful that Wisconsin gets back only 88 cents for every tax dollar it sends to Washington. That's the chumphood issue that no one seems too excited about. By some measures, the situation has worsened during Gov. Jim Doyle's administration.
For example, with regard to federal grants to state and local governments, Wisconsin slipped from 31st place in fiscal 2002 to a dismal 43rd place in 2007.
"The drop in rankingcost Wisconsin taxpayers roughly $250 million per year," says Hefty. "If Wisconsin could achieve the national average in federal funding, the state would gain over $1.5 billion in a two-year budget just in aid to state and local government." Think of the property tax impact of that.
Similarly, for all the hubbub over the stimulus money, the state has performed badly. A Wall Street Journal survey of the first $200 billion allocated to the states found Wisconsin languishing in 45th place. Our $561 per resident in stimulus spending was just about a third of what those hardy anti-government Alaskans received.
More than anything, Wisconsin needs an attitude change.
Hefty, whose Blue Cross-Blue Shield operation included a subsidiary that processed Medicare claims across the country, is astonished at how casual Wisconsin politicians can be about federal contracts and grants.
Senators like Robert Byrd and Jay Rockefeller, he complains, "would fight harder for 50 jobs in West Virginia than the Wisconsin delegation would fight for a thousand jobs in Wisconsin."
States that do well in the federal-money chase, Hefty notes, are characterized by "an aggressive congressional delegation, savvy state officials and good working relationship between state and local government."
That's nobody's description of the current Wisconsin dynamic. Still, lightning could strike. Doyle may yet land a big federal grant to fund high-speed rail in Wisconsin. And with David Obey running the House Appropriations Committee, Wisconsin now has what Mordecai Lee calls an "anti-Proxmire" in a powerful position.
After 40 years in Congress, Obey is a gnarly realist, says Lee, strong in his opinions but willing to play the inside game to get things done. Like Les Aspin, Obey is an apostate to Wisconsin's saintly political tradition.
So many of our politicians like to pose for holy pictures, basking in the warm glow of fiscal rectitude and ideological purity. No doubt we voters feel better about ourselves as we politely applaud their noble sentiments.
Just one question: When will we realize we're being played for chumps?
