Bushwhacked In Texas

Scheme to privatize 13,000 public-sector jobs suggests danger of a Bush presidency.

Everything is big in Texas. Big hats, big boots, big ranches — and Texas Gov. George W. Bush’s attempt to establish what would have been the biggest privatized welfare system in the country.

It was, in the words of Associated Press writer Michelle Mittelstadt, “the most far-reaching welfare privatization plan yet advanced in any state.”

Opposed by a coalition of unions and other groups, Bush didn’t succeed. But to those who fought his welfare plan, the man who now bills himself as the “compassionate” politician proved his lack of support for those who work in public service.

It’s a cautionary tale of what a Bush presidency could mean to those in the public sector — and just one of many examples of Bush’s philosophy of limited government.

Consider:

• Private prisons have flourished in Texas under Bush. The state has at least 38 private prisons, far and away the most of any state, despite increasing problems like violence and the fact that a poll commissioned by AFSCME last year demonstrates the public overwhelmingly opposes them (51 percent against, 28 percent in favor).
• Bush, on his own campaign Web site, touts his support for an anti-labor proposal that would have limited the political strength of labor by requiring unions to get permission from each member before they could use dues for educating members on issues they care about.
• During the 1999 Texas legislative session, Bush supported legislation to raid his state’s workers compensation fund and its teachers pension fund, jeopardizing employee benefits and pensions.
  lBush has vetoed several pro-labor bills, including one that would have prohibited employers from firing public and private workers so they could hire welfare recipients.
• In 1997, Bush proposed a pilot program to privatize a state mental institution, which could have benefited a former business partner and campaign contributor, Richard Rainwater, according to the Houston Chronicle.

But the most serious threat to public employees in Texas was Bush’s attempt to privatize his state’s welfare system. The plan threatened the jobs of 13,000 state employees who perform eligibility and enrollment functions for a variety of health and human services.

“You don’t need a crystal ball to see what the future would be like for public employees if Bush becomes president,” says Jesse Colunga, president of AFSCME Local 1624, which represents about 1,800 Texas public employees. “You just need to look closely at what he has done or tried to do.”

THE RECORD. Bush, son of the former President, was elected governor of Texas in 1994. He made reducing the size of government a top priority.

The crown jewel of his plan to shrink state employment rolls was an initiative to privatize eligibility determinations for social services. It became known as the Texas Integrated Enrollment System (TIES).

TIES began quietly in 1995 as part of a welfare reform bill that also included a little-noticed provision establishing the Texas Workforce Commission. This new agency consolidated a number of employment and worker training programs.

“It caught us off-guard,” says Colunga.

The provision had been pushed by a Bush legislative liaison who later raised eyebrows when he went to work for Lockheed Martin IMS, a major private firm seeking the state’s welfare contract worth $2 billion.

Bush claimed his plan would save $120 million of the $500 million that Texas spent annually to determine eligibility for welfare, food stamps and Medicaid services.

But some suspect he had other motivations for trying to cut the state’s employment rolls.

“He was planning to run for president partly [by claiming] ‘I got rid of 15,000 welfare bureaucrats in our state,’” says Michael Gross, vice president and an organizing coordinator for the Communications Workers of America (CWA) Local 6186, which represents about 15,000 Texas state employees. “I think there was a vision that it would be a springboard to national prominence.”

BATTLE ROYALE. Lockheed Martin, an aerospace giant trying to expand into the management of welfare services, was the major contractor seeking to administer $8 billion worth of social service benefits from two dozen federal programs in Texas.

Also seeking contracts were Electronic Data Systems (EDS, founded by former owner Ross Perot), Unisys and IBM.

The privateers “had a vision that if they could nail down the Texas contract, then they could plow through the rest of the country,” says Gross.

With Bush at the helm in Texas, they almost succeeded.

The idea “was to put the [privatization plan] in motion and accomplish it so fast that opposition didn’t have a chance to coalesce and become effective,” Gross explains.

“The climate they tried to set up,” he adds, “was that it’s a mandate [to privatize], that it’s a train that’s already going full speed.”

It was about to become a train wreck.

In the fall of 1995, the unions decided to “wage an all-out fight on this,” remembers Gross. “We saw this as a defining battle over what kind of country we are going to be. We said this has to be beat in Texas. It has to be beat definitively and on its own merits, not [by cutting] a deal.”

The Texas State Employees Union/Communications Workers of America (TSEU/CWA), AFSCME Local 1624 and the AFL-CIO joined with a host of religious, civil rights and public policy groups to block Bush’s plans.

The unions mounted a grassroots campaign that included letter writing, organizing, education, protest actions, a mass mailing of more than 11,000 postcards and a series of radio ads, including one that featured the sounds of bombs exploding.

“Texas is under attack,” the announcer said. “They’re coming after us. The guys who brought us $3,000 toilet seats [Lockheed Martin] are trying to take over public services for families, children and seniors.”

CWA also called on Travis County prosecutors to investigate six former state officials who left their jobs to work as lobbyists for corporations seeking state contracts to operate welfare services.

“Our strategy was this — to not take their word for it that it was a done deal,” Gross explains. “We decided, in fact, that it could be defeated, but we wanted to do it with a grassroots movement. We knew it couldn’t be defeated with [union] lobbyists walking through the [Texas] Capitol.”

This was more than a fight to save union jobs, adds Colunga. “We wanted to make sure we protected vital public services.”

On Lobby Day, April 16, 1997, more than 1,700 union members, reinforced by members of the NAACP, the Mexican American Legal Defense and Education Fund, the National Organization for Women and other groups staged a rally at the Texas Capitol to protest privatization.

They also worked with their international unions to take the fight to Washington.

PRIVATIZATION ADVANCES. Ironically, what made privatization of social services possible was a new federal welfare reform bill signed into law by President Clinton.

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 established a new government program called Temporary Assistance for Needy Families (TANF).

TANF replaced the 61-year-old federal program of guaranteed cash assistance to the nation’s poorest children, known as Aid to Families with Dependent Children.

The new law also removed restrictions that prevented states from contracting out welfare (TANF) eligibility determinations.

Consequently, Bush could have unilaterally privatized TANF eligibility jobs in Texas. But to privatize jobs that determine eligibility for food stamps and Medicaid, the governor would have to seek a federal waiver.

Since the Texas Department of Human Services operated a system that jointly determined eligibility for welfare, Medicaid and food stamp applicants, Bush needed that waiver to advance his privatization plans.

In the fall of 1996, the Bush administration sought it.

CLINTON SAYS NO. Early in 1997, AFSCME Pres. Gerald W. McEntee, CWA Pres. Morton Bahr and AFL-CIO Pres. John Sweeney met with President Clinton to express their opposition to Bush’s privatization scheme.

“We believe that it’s morally wrong to permit a private, for-profit company — whose primary incentive is the bottom line — to profit from the misfortunes of needy families,” McEntee said at the time.

“I can assure you,” Vice Pres. Gore said later, “that this administration will do what is best for recipients of public assistance, and ... will look out for the interests of the workers who devote their lives to helping those recipients.”

Clinton formally rejected Bush’s request for a waiver on May 13, 1997. Bush could proceed with his plan to seek bids from private companies, but state employees had to continue to screen Medicaid and food stamp applicants, he ruled.

“When it didn’t go,” recalls Gross, “Bush was actually in Washington screaming how union bosses and bureaucrats had stopped progress in Texas.”

A BAD IDEA. Ultimately, Bush did manage to privatize two state programs. JOBS, for Job Opportunities and Basic Skills, was renamed CHOICES and passed to local workforce boards and then to private contractors such as Lockheed, says Gross. The other was an employment and training program for food stamp recipients.

But opponents of Bush’s broader welfare privatization plan had prevented a major public policy disaster.

“I think we need to make some fundamental statements about what things are important to be government’s role,” points out Patrick Bresette, associate director of the Center for Public Policy Priorities in Austin. “In our minds, fundamental, basic support services for poor families deserve to remain in that essential government role category.”

Bresette, who is responsible for research and policy development on issues affecting children and families in Texas, says the idea of contracting out “crucial and, in some cases, life and death decisions for poor people ... is not necessarily an appropriate use of privatization.”

LOOKING AHEAD. Since Bush’s plans were blocked, only three other states have applied for waivers of the welfare privatization restrictions.

Arizona was denied. Florida’s application is pending. So is Wisconsin’s. “We never said no, and Wisconsin never pursued it,” said Phil Sandholtzer, spokesman for the U.S. Department of Agriculture’s Food and Nutrition Service, which administers the food stamp program.

But privatization could expand under a Bush presidency, warns Rick Levy, legal director of the AFL-CIO in Texas.

“It would probably be one of the centerpieces of his agenda,” he predicts. Clinton’s ruling that blocked privatization of social services could be reversed.

“I think you would see the Department of Labor forced to back off its efforts to maintain public control of the unemployment insurance system,” Levy adds. “I think you would see the privatization of Social Security.”

Gross, of CWA, agrees.

“I think Bush becoming President will mean on the order of 20,000 state jobs in Texas” falling into the hands of private contractors, Gross foresees. “If he gets elected, we figure it’ll be all over for us in Texas.”

“I’d really hate to think about that,” says AFSCME’s Colunga. “I think a lot of public employees’ jobs [throughout the country] would be threatened” by a Bush presidency.

OUT OF TOUCH. “Government can be efficient and perform effectively,” Bush observed in remarks delivered in Dallas on March 31, 1998. “But to do so, it must be limited in scope and focused.”

The public doesn’t buy it, however. An AFSCME-commissioned poll by Lake Snell Perry & Associates last October revealed that 42 percent of the general public opposes privatization of government services, compared to 31 percent who favor it.

An even greater number, 45 percent, oppose privatization of welfare services, and a majority of the public — 51 percent — oppose private prisons.

“If he runs on [privatization of public services], it’s going to have a lot less appeal than he assumes,” says pollster Celinda Lake. “If he doesn’t run on it but tries to implement it, I think people will find [Bush] is not compassionate” as he claims.

The public believes “the profit motive is not the best motive to determine eligibility” for welfare, Lake adds. “They’re also very suspicious of privatization when innocent people could be victimized, particularly children and seniors.”

But the voters have yet to become suspicious of Bush.

“Voters don’t know very much about Bush yet,” says Lake. “Right now, he’s assuming voters are signing off on what he’s done in Texas, when in fact people don’t know very much about what he’s done.”

That means unions have a big role in educating their own members, as well as the general public, about the true Bush record, according to Colunga and others.

“We’re definitely going to have to do our work and get people out to vote,” states Colunga.

By Clyde Weiss

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