This month, one of the three major bond credit rating agencies downgraded its outlook on the fiscal health of the federal government. The credit rating agency considered the ability of the federal government to address its budget deficit and ballooning debt in reaching its conclusion. The analysis of the budget situation in Washington caused the credit rating agency to change the United States’ outlook from stable to negative.
If the U.S. were to lose its triple-A rating, the economic implications could be disastrous. The stock market surged downward on the news and public concern heightened over what, if any, actions federal lawmakers would take to correct course.
On the other hand, Wisconsin’s state budget bill and accompanying reforms led to a prospective upgrade in its credit rating from another major bond credit rating agency last month. The legislature’s non-partisan fiscal analysts noted that the budget bill currently being considered would put the state’s finances in the best position in over 15 years. The budget bill would accomplish this feat while holding the line on property taxes and without raising taxes.
The disparity between where the federal government and Wisconsin are headed on addressing our serious fiscal problems is clear. The reforms and government spending reductions in Wisconsin’s budget bills are serious approaches to restoring our state’s fiscal health. Under the current budget bill proposal, our structural deficit would be reduced by over 90%, a remarkable reduction.
As most people know, these changes are not coming easily. As the saying goes, if it were easy to do, it would have been done long ago. Instead, the prior administration and leadership from both political parties put off the tough choices. The refusal to lead on this issue only made the problem worse. The reform and budget measures presented this year represent a stark break from the politics of the past €“ where government promised more than taxpayers could afford.
Of course, these changes meant taking on entrenched special interests that have an interest in more and more spending while maintaining the status quo. But, these reforms and reductions have been made with the intent to avoid mass layoffs, protect the taxpayers, and preserve critical services that our citizens rely upon.
Today, 33 states have a higher credit rating than Wisconsin. If Wisconsin continues to prove it can rein in spending, our credit ratings will improve. The protests in our communities surrounding these reforms may be difficult, but we need to make the difficult choices that protect future generations.
I welcome your input on these spending reductions and reforms €“ or if you have other ideas on how to best tackle the state’s $3.6 billion shortfall. Please stay in touch by calling my office at 1-800-862-1092 or sending me an e-mail to Sen.Harsdorf@legis.wi.gov .