More On Scott Walker's Stadium Corporate Welfare

Scott Walker Takes $250 Million From U. Wisconsin, Gives $250M To Billionaire Sports Team Owners

On Wednesday, Walker signed a bill that would spend $250 million of taxpayers’ money to build the new arena. Last year, the team TISI +% was purchased by two billionaire hedge fund managers, Marc Lasry and Wesley Edens. In what’s become a standard ploy, the new owners threatened to move the team if they didn’t get a new arena.

As the Washington Post reported on Thursday, one of the team’s other owners is Jon Hammes, one of Walker’s top campaign fundraisers. Hammes’ son recently donated $150,000 to a pro-Walker super PAC. For the Hammes, this must feel like a pretty good return on investment: $150K plus some fundraising work in return for $250 million. (Obviously, Walker will deny that there’s been any quid pro quo. But Walker has been working on this deal for months: according to the Milwaukee Journal-Sentinal, he included $220 million in state money for the arena in his budget back in February, but state lawmakers took it out.)

Scott Walker's Misguided Stadium Deal

Wisconsin Governor Scott Walker on Wednesday signed a bill approving $250 million in public funding for a new arena serving the Milwaukee Bucks, which seems to fly in the face of both Walker's presidential campaigning as a fiscal conservative and his insistence that there isn't enough money for things like public education or living wages. In July, when Walker signed the state's new budget, he cut funding to the University of Wisconsin by $250 million.

The usual pitfalls involved in stadium financing are apparent here: unrealistic calculations of return on investment, an underestimated true cost to taxpayers, misplaced priorities, fishy-looking political relationships. Walker can talk all he wants about lowering taxes and cutting waste, but when all is said and done and you include $174 million in bond interest over 20 years, he's sinking upwards of $400 million into a stadium for a team owned by billionaire hedge-fund managers in a state with a projected $2.2 billion deficit. Owners Wesley Edens and Marc Lasry will kick in $150 million, while former owner and senator Herb Kohl is contributing $100 million, but $93 million in bonds by the Wisconsin Center District will be paid for by an extension of taxes on hotel rooms, car rentals, and food and beverage sales.

Scott Walker is America’s biggest hypocrite: The “fiscal conservative” is giving $450 million to wealthy sports owners

Tomorrow, Scott Walker will stand on a stage at State Fair Park in Milwaukee, Wisconsin, and betray virtually every conservative economic principle there is by handing out up to $450 million in taxpayer money to wealthy sports owners to pay for private infrastructure at a time when public infrastructure is crumbling.

The massive sum will go toward the building of a new sports arena for the Milwaukee Bucks basketball franchise, pleasing the team’s billionaire hedge-fund-manager owners, who threatened to move the team if they weren’t given taxpayer tribute. Conservatives in recent years have feigned concern about corporate welfare, and this deal is really the ultimate expression of it: hundreds of millions of dollars from teachers, waitresses, factory workers and shop owners funneled to pay for an aristocrat’s show palace rather than needed public service. 

Of all the things desperately wrong with this, perhaps the most salient is the fact that the “old” arena, the BMO Harris Bradley Center, is only 27 years old, inaugurated in 1988. Incredibly, this makes it the 3rd-oldest arena housing a professional basketball franchise, behind only Madison Square Garden in New York and the Oracle Arena in Oakland, both of which have been substantially renovated over the years. 

We don’t upgrade anything in this country after 27 years. There are pipes carrying water to homes that date back to the 19th century. In Milwaukee, in fact, hundreds of those pipes burst at a record pace in 2014 due to the cold weather. Seventy-one percent of Wisconsin roads are in mediocre or poor condition, and fourteen percent of its bridges are structurally unsound. If you wanted to prioritize infrastructure projects needing attention in the Badger State, “replacing the arena we built in the late 1980s” would fall down the list, somewhere below “make sure the thing Wisconsinites are riding on in cars doesn’t crash to the ground.”

Scott Walker Push For Milwaukee Bucks Arena Subsidy Could Benefit His Fundraising Chief

Real estate mogul Jon Hammes, who has donated hundreds of thousands of dollars to Republican candidates and causes, is a prominent member of the investor group that owns Milwaukee’s NBA team. Last week CNN reported that he also will serve as the Walker campaign’s national finance co-chairman. Days after that appointment, Walker’s Republican allies in the Wisconsin state Senate backed the governor’s proposal to spend public funds on a new arena for the Bucks.

In his speech announcing his presidential candidacy, Walker presented himself as a free-market conservative and derided what he called a “top-down, government-knows-best approach” to economic policymaking. Hammes serves on the board of a conservative think tank called the Wisconsin Policy Research Institute that says “competitive free markets, limited government, private initiative and personal responsibility are essential to our democratic way of life.” 

But under Walker’s proposal, the government would redistribute taxpayer money to a project benefiting Hammes and other Bucks investors.

Did Bucks Investors Pay Off Walker?

“However, before Walker proposed the arena deal, Hammes had donated more than $15,000 to his gubernatorial campaigns, according to state campaign finance data,” the publication reported. “Federal records also show that over the last decade, Hammes has donated almost $280,000 to Republican candidates and third-party groups — including more than $14,000 to the Wisconsin Republican Party. Hammes Company in 2010 donated $25,000 to the Republican Governors Association, which that year spent heavily in support of Walker’s first run for governor. Jon Hammes also contributed $500 to Walker while he was a Milwaukee county executive… Hammes became one of the part owners of the Bucks in 2014. A little more than three months later, Walker unveiled his proposal to spend a quarter of a billion dollars on a new arena for the team.”

The Ol' Switcheroo

Jason Stein did a nice job a highlighting Scott Walker's brazen hypocrisy. Further confirmation of what many Wisconsinites already know - Scott Waker is a self-serving, opportunist, liar.

Scott Walker Touts Local Power, But Doesn't Always Defer To Local Governments.

On the campaign trail, presidential candidate Scott Walker speaks about shifting power from the federal government to state and local officials. 

But as governor, Walker hasn't always favored more power for local officials. While often giving local governments more options, Walker hasn't been afraid to take a wide range of powers away from liberal local officials in Wisconsin who adopt policies unpopular with conservatives...

Walker and GOP lawmakers have passed a number of limits on local elected officials, drawing frequent criticism from Sen. Bob Wirch (D-Pleasant Prairie). 

"He cut the power of city councils, village boards, county boards. It's shameful. These are big-government Republicans," Wirch, a former county board member, said of the governor and legislators. "They drive up to the Capitol with small-government bumper stickers and make big-government Republican decisions..."

Walker and legislators from his party have: 

■ Set limits on tax and spending increases for schools and municipalities.
■ Pre-empted Milwaukee's residency rule, which dates back to 1938 and requires city employees to live within city limits. That law was reinstated last month by a state Appeals Court in a decision that is likely to be appealed.
■ Voided the paid sick leave law passed by Milwaukee voters in a referendum.
■ Restricted the duties and staff of the liberal Milwaukee County Board with a May 2013 law. That law also put to voters a proposal to cut the pay of elected board members by 50% and eliminate their future health and pension benefits, which county voters approved a year later.
■ Prohibited election clerks in urban areas from allowing early voting on the weekends. Walker did use his partial veto power to nix language restricting early voting hours in Milwaukee and other cities to 45 hours a week.
■ Limited local control over the siting of cellphone towers.
■ Given responsibility for liberal Dane County's water quality plan to the Walker administration while leaving the other 71 counties in Wisconsin alone.

Republicans blather on and on about local control and putting the power back in the hands of the people. But empowerment isn't their true aim. Rather, Republicans merely want whichever policy best allows them free rein to use federal, state and local government coffers as their personal piggy banks.

Republicans talk of personal freedom, lower taxes and other platitudes from their playbook, but their end game is keeping power in their hands. The folksy, "you know better than the government" line they repeat ad nauseam is simply the candy-coating of the bitter pill they'd like us all to swallow.

Keep Republicans Away From Social Security

Here's yet another prime example of why Scott Walker and the Republican party are wrong for America.

Scott Walker Suggests Raising Age To Qualify For Social Security.

There is so much misinformation out there regarding Social Security. Much of it pushed by conservatives who would like to end the program.

For starters, hopefully everyone is aware that the current full Social Security retirement age (for those born after 1960) is 67.

As Ezra Klein stated:

But “cutting” Social Security is unpopular and people don’t like to talk about it. So folks who want to cut the program have instead settled on an elliptical argument about life expectancy. Social Security, they say, was designed at a time when Americans didn’t live quite so long. And so raising the retirement age isn’t a “cut.” It’s a restoration of the program’s original purpose. It doesn’t hurt anything or anyone. 

The first point worth making here is that the country’s economy has grown 15-fold since Social Security was passed into law. One of the things the richest society the world has ever known can buy is a decent retirement for people who don’t have jobs they love and who don’t want to work forever. 

The second point worth making is that Social Security was overhauled in the ’80s. So the promises the program is carrying out today were made then. And, since the ’80s, the idea that we’ve all gained so many years of life simply isn’t true…. 

[S]ince 1977, the life expectancy of male workers retiring at age 65 has risen six years in the top half of the income distribution. But if you’re in the bottom half of the income distribution? Then you’ve only gained 1.3 years.

Christian Weller adds:

Workers who have paid into Social Security have to wait until a specific age before they can receive full retirement benefits. In the past, the full retirement age was 65, but it has been gradually increasing and will eventually reach 67 for people born in 1960 and later. Retirees can still claim Social Security at age 62, but their benefits will be reduced significantly if they do. These permanent benefit reductions are greater the earlier somebody claims Social Security and the higher the full retirement benefit age is. Some conservatives, including Cruz and Paul as well as former Florida Gov. Jeb Bush, have now called for raising the full retirement benefit age even further –- for instance, to 69 years. This translates into across-the-board benefit cuts due to Social Security’s formula, which yields a larger amount for every month a worker delays claiming retirement benefits up to age 70. And it translates into especially deep cuts for workers who must retire early. These cuts are particularly harmful to lower-income workers and people of color.

David Rosnick and Dean Baker have found that increasing the Social Security qualification age also increases inequality:

The full retirement age for Social Security benefits – originally 65 – is currently 66 years, and is scheduled to increase over the next 15 years to age 67 for workers born in 1960 and later. Every year of increase in this “normal” retirement age (NRA) is equivalent to a cut in benefits of 6-7 percent.1 Despite this increase, there has been discussion of raising the retirement age even further – to 69, 70, or even higher.

Rosnick and Baker, in their research, also address the falsities regarding solvency and life expectancy:

The primary justification for such an increase is that the Social Security Trust Fund faces a looming shortfall. Yet the Congressional Budget Office projects that Social Security will be able to pay all promised benefits through 2038.2 Thereafter, even with no changes whatsoever, Social Security will be able to pay more than 80 percent of benefits until 2070. Under current law, a young worker planning to retire at age 70 will receive a monthly benefit 24 percent larger than if the same worker retired at age 67. However, those credits for delayed retirement would be eliminated if the retirement age were increased to 70, resulting in a 19 percent cut in benefits. In addition, workers who start collecting benefits at an earlier age would see a reduction in benefits of roughly 18 percent compared to current law.

Another justification for an increase in the retirement age is that life expectancy is increasing, and the retirement age has not kept up. But this makes little sense when discussing workers in physically demanding jobs who are often unable to continue working into their late 60s. Additionally, as we reported in earlier work, there has been considerable widening of the gap in life expectancy between high- and low-income workers. As a result, the already-scheduled increase in the retirement age has effectively wiped out the gains in expected years of retirement (if workers retire at NRA) for males in the bottom half of the income distribution.

Paul Krugman elaborates:

Start with Mr. Christie, who thought he was being smart and brave by proposing that we raise the age of eligibility for both Social Security and Medicare to 69. Doesn’t this make sense now that Americans are living longer? 

No, it doesn’t. This whole line of argument should have died in 2007, when the Social Security Administration issued a report showing that almost all the rise in life expectancy has taken place among the affluent. The bottom half of workers, who are precisely the Americans who rely on Social Security most, have seen their life expectancy at age 65 rise only a bit more than a year since the 1970s. Furthermore, while lawyers and politicians may consider working into their late 60s no hardship, things look somewhat different to ordinary workers, many of whom still have to perform manual labor. 

And while raising the retirement age would impose a great deal of hardship, it would save remarkably little money. In fact, a 2013 report from the Congressional Budget Office found that raising the Medicare age would save almost no money at all.

The bottom line is that we all need to be very leery of Republicans claiming to have the best interests of social programs at heart when they propose increasing eligibility ages, reducing payouts or any of their other trojan horses. Social Security is too important to be left to the whims and disproven ideas of Republican apparatchiks.

For Further Reading:

Social Security

Social Security

Social Security