Zac Schultz:

Good evening. I’m Zac Schultz, filling in for Frederica Freyberg. Tonight on “Here and Now,” in our first look segment, U.S. Senator Tammy Baldwin on the latest health care bill in Washington. Then a closer look at ongoing legal troubles for the state juvenile correctional school, Lincoln Hills. Then a new study that sheds light on the impact tax cuts have on the state budgets. It’s “Here and Now” for July 14th.

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Zac Schultz:

A first look tonight. Senate Republicans in Washington have unveiled their latest attempt to repeal and replace the Affordable Care Act or Obamacare. Republican U.S. Senator Ron Johnson joined us on this topic two Fridays ago. Joining us now from Washington is Democratic Senator Tammy Baldwin. Thanks for your time today.

Tammy Baldwin:

Thank you.

Zac Schultz:

The latest bill has a number of changes from the first Senate proposal, including keeping some of the Obamacare taxes on the wealthy. But I'm guessing the changes aren’t enough to gain your support at this time.

Tammy Baldwin:

Exactly. I can tell you what hasn’t changed. What hasn’t changed is that millions will still be losing their insurance under this plan. Medicaid is capped and cut in ways that will threaten people with disabilities or parents of children with disabilities, those with loved ones in nursing care. And this so-called age tax, the ability to charge much higher premiums to those who are 50 and older, is still a persistent problem and it does very little to stabilize the market. So I hope that my Republican colleagues continue to hear what I've been hearing from Wisconsinites. They are speaking out. They are very aware of how harmful this measure is. And I am hoping they continue to urge a no vote on this new piece of legislation.

Zac Schultz:

We last had you on the program in March when this same thing was playing out in the House. They had just pulled back their first attempt and only later were they able to pass a bill that was immediately ignored by the Senate. But it seemed like it was dead until it passed. Do you think a similar thing can happen in the Senate?

Tammy Baldwin:

You know, it’s certainly hard to project. At this point, two Republican senators have indicated that they will not vote to proceed with this matter. They can only lose one more. But that’s really, you know, a question mark as we head into the next week. What’s so important is that Wisconsinites and others deeply impacted by this continue to speak out. You know, Zac, health care is so personal. I know that from my own experience. As a child, I had a serious illness and then was labeled as a kid with a pre-existing condition. And for much of my youth I didn’t have health insurance. I have heard from so many parents, individuals, families who care deeply about a member with a pre-existing condition. I think about a young man I met from Denmark, Wisconsin born with a congenital heart defect and required several surgeries. He and his parents in particular fear greatly for the future if something like this measure were to come to pass because it so significantly weakens the protections, the guaranteed protections people have today to be able to get coverage and care if they have a pre-existing condition.

Zac Schultz:

Now the latest version might also include the so-called Cruz amendment for Texas Senator Ted Cruz which would allow for cheaper insurance options. But why is that idea getting so much pushback from many in the medical community?

Tammy Baldwin:

Well, really what they’re called is junk insurance policies. They may be very low price, but that’s because they don’t provide any significant coverage. Imagine having insurance like in the old days and finding out in your time of need that it won’t even cover a hospitalization or won’t cover a round of cancer treatment. We don’t need a two-tiered system. And the other thing is that people who are older or sicker, have pre-existing conditions are likely to become concentrated in the health insurance market, leading to even higher premiums. So it would be a two-tiered system, which everybody believes is heading us in the wrong direction.

Zac Schultz:

Now there are also reports that Republican Senator Lindsey Graham is working on a compromise version that would essentially block grant all the federal monies to the states to use on health care as they use. Senator Graham says that he thinks that could eventually gain Democratic support. Would it gain your support?

Tammy Baldwin:

You know, what has to happen first and our only short-term objective has to be defeating this repeal attempt. This is really partisan nonsense, making good on a pledge, a seven-year-old pledge which is not helping people be able to afford their health care. As soon as they renounce the efforts to repeal the Affordable Care Act, there is so much we can do to work together, to bring down prices, make things more affordable while keeping the guarantees that people now have, for example, for coverage for people with pre-existing conditions. I think that once they dispense with the partisan nonsense of the repeal, there is a lot of productive work we could do together and I will actually welcome any good ideas for discussion and debate. And there’s clearly things we can do right now that have broad bipartisan support. Take, for example, focusing on the high cost of prescription medication. I have reached across the aisle and am working with John McCain to address issues like the EpiPen, life-saving medication for those with severe allergies that has spiked up to $600 a pack. And we can do things to relieve the cost issues, to stabilize the insurance markets. And I think what we need to do is get to that point and dispense with the countless efforts to repeal the Affordable Care Act, Obamacare.

Zac Schultz:

Now, if this bill fails, Republicans say that Obamacare is in a death spiral and will die on its own and Democrats are saying Republicans are sabotaging the Obamacare markets. But the people in Wisconsin, who are only seeing fewer health care options in their area, perhaps only a single option in Obamacare market, can they tell the difference between failure and sabotage and does it matter if they only have one choice?

Tammy Baldwin:

Well, Wisconsin has a number of insurance participants, but obviously there are counties where there are fewer choices. I will note that the recent exit from the insurance market in Wisconsin, Anthem Blue Cross/Blue Shield cited in its letter explaining its actions. Actions taken by the Trump administration leading to greater uncertainty. And that is something we can absolutely confront on a bipartisan basis. Stabilizing the market by making it clear that the — what are known as the cost-sharing reduction payments are made. That’s what Trump is threatening potentially not to make, will absolutely lead to more certainty, more stabilization. You know, insurance markets need certainty. And I have absolute confidence that we can work together to do so. In fact, last week when we were all home during the 4th of July recess, Mitch McConnell opened the door to that. He said that if he couldn’t muster the Republican votes to repeal Obamacare, that he could work across the party aisle to stabilize insurance markets. But to do what we all know we must do if we listen to our constituents, which is to keep the guarantees that people with pre-existing conditions can get coverage and reduce costs.

Zac Schultz:

All right. Well, Senator Baldwin from Washington, thanks for your time.

Tammy Baldwin:

Thank you.

Zac Schultz:

Senator Ron Johnson was opposed to the previous version of the bill. He told Bloomberg News yesterday that he supports opening up a debate on this version of the bill, but was not ready to give his full backing.

Juveniles at the Lincoln Hills correctional facility can expect fewer days in solitary confinement and less pepper spray in the future. In tonight’s closer look, the Wisconsin Department of Corrections says it will not appeal a federal judge’s ruling that said workers showed “Callous indifference to the harm being inflicted on juvenile prisoners.” But this isn’t the end of the story. Earlier this week we spoke to Patrick Marley, reporter for the Milwaukee Journal Sentinel, about the remaining lawsuits and investigations still pending at Lincoln Hills.

It's been three weeks since a federal judge ruled the Department of Corrections and the ACLU, they need to agree on a plan to reduce the use of pepper spray and confined spaces. What have we seen so far?

Patrick Marley:

Since then they have put together a plan and the judge has ruled on it. The two sides couldn’t agree on all the details, so the judge came in and said they need to reduce the amount of time kids are put in solitary confinement for punishment to seven days. The maximum currently is 60 days. So it’s a dramatic drop in how much time. And then when they’re in there, when they’re in solitary confinement, they have to be out for at least 30 hours a week for meals, education, those kinds of things. There’s also a sharp reduction in how much pepper spray they can use. Now as we’ve seen from the videos that were released in the court hearing, kids would get sprayed for refusing to go in their room or something like that. Now they can only do it if someone’s being–harming someone or there’s an immediate risk that they will harm someone.

Zac Schultz:

There have been allegations of abuse and mistreatment at Lincoln Hills for a couple of years now. Has the release of the videos to the public changed the way people are approaching this?

Patrick Marley:

We've been reporting for a year and a half about very serious problems that have been going on for a long time at Lincoln Hills. I think the videos–there are two videos released through this court case and we obtained a video on our own of an incident that happened in 2013. I think the public being able to actually witness how things operate there with their eyes and see it for themselves has changed the way some people may perceive this. It’s a little abstract when you’re just reading words in a newspaper. It’s a lot more real when you see people in riot gear going up to a cell door and spraying pepper spray through a slot in that door because a juvenile won’t take their hands out of the door.

Zac Schultz:

And do you think people are reacting differently because these are juveniles? You can hear they’re kids’ voices, kids’ body as opposed to just an inmate.

Patrick Marley:

Well, Wisconsin has had a long policy of trying to treat juvenile inmates differently than adult inmates. Some of these kids are in there for very serious crimes, carjacking, some of them even homicide. But the notion Wisconsin has adopted is that kids are more susceptible to rehabilitation. That there’s a better chance they can turn their lives around. And it’s more important we as a society do turn them around because they’re going to live a lot longer than an adult inmate. So what the judge found is that many of the things that are done at Lincoln Hills are not in keeping with that policy. He hasn’t made a final ruling, but they appear not to be keeping with that policy and they appear to be violating the constitutional rights of these inmates.

Zac Schultz:

And other judges are saying the same thing. County judges in southeast Wisconsin are actually sending fewer children there.

Patrick Marley:

We've seen a huge drop in the number of kids being sent to Lincoln Hills. Part of that appears to be of the grave concerns about how the facility has been operating.

Zac Schultz:

More than a year ago we had you on the program to update us on the different lawsuits and the federal investigation. What do we know now?

Patrick Marley:

We still don’t know where this federal investigation is. The FBI’s in charge of it now. It’s been going on for two and a half years. First the State Department of Justice was doing it. Now the FBI is doing it. There’s also a civil investigation being done by the U.S. Department of Justice. There’s at least five lawsuits that I'm aware of. But really the prosecutors are very tight-lipped. We don’t know if they’re going to issue charges. We don’t know when they’re going to wrap this up and make those kind of decisions. They just won’t tell us.

Zac Schultz:

Is there any possibility that the shift in Washington with the Department of Justice could alter the way this is handled?

Patrick Marley:

I talked to the former U.S. attorney about that, and he didn’t think so. He thinks that the Department of Justice, the U.S. Department of Justice is a professional organization that’s going to continue to do what it does regardless of who the president is. We haven’t seen any evidence. You know, the thing was taking a long time and was being kept from the public, which is typically how prosecutors act. So we have not detected any shift. We just don’t know.

Zac Schultz:

Governor Walker also has a new secretary in the Department of Corrections. Has he made any changes?

Patrick Marley:

Yes. There was a raid on the facility in December of 2015 and the Department of Corrections made a number of changes. First, they put all new leaders in at the Department of Corrections, mostly new leaders at the prison itself. They gave a lot more training to all the staff there. They now put them through a six or seven-week training course where before it was two weeks on the job. They have equipped everybody with body cameras. They’ve installed more fixed cameras in the facility. The administration has touted that a lot. Those are real changes that have been made. The judge, you know, the case that the ACLU brought is really all about activities there since that raid. And the judge said there have been no concrete or substantive steps toward reducing solitary confinement, reducing the use of pepper spray. That’s what this lawsuit is really focused on.

Zac Schultz:

What about the state budget that’s still ongoing? Are there any changes for Lincoln Hills there?

Patrick Marley:

The state budget is totally stalled, as you know, on other issues like transportation. They have voted on the budget for the Department of Corrections and they’re putting more money into mental health work. At Lincoln Hills they’re formalizing a policy where only nurses and medical staff will give out medicine. Previously it had been guards who had given out medicine. And we documented some cases where teen inmates got the wrong medicine. So there are those kinds of changes. But they are not making really substantive changes to the way the place operates those in the prison reform community have wanted. The opponents of this place want to shut it down and have it move to regional centers. That would be very expensive and lawmakers have not shown interest in that so far.

Zac Schultz:

Is there any sense that this is going to become political as we approach the next gubernatorial election?

Patrick Marley:

Some Democrats have criticized Governor Walker because he’s never visited Lincoln Hills. When I asked him about it, he said he didn’t see a need to go there because he believes he’s putting staff who are going to be responsive and responsible for running it. And he said that he didn’t think — he didn’t think when a politician visits a prison they get a real look at what the prison is like. That you just see what they want you to see. Some Democrats have been very critical of that saying he should be up there making it more of a priority. Who’s to say in the next year how much of a political issue people try to make it.

Zac Schultz:

We just found out that they're going to invite media members to possibly tour some facilities.

Patrick Marley:

Yes. We had an opportunity to visit Lincoln Hills back in December, a pretty good tour of getting to see both the–they stay in cottages. They’re spread around on campus. Seeing the ordinary cottages as well as the secure, solitary confinement wing, the school itself that’s on the grounds. Now they’re talking about doing similar tours of adult prisons, the state’s womens prison. So we’ll be looking forward to seeing what that’s like.

Zac Schultz:

Patrick Marley, thanks for the update.

Patrick Marley:

Thanks.

Zac Schultz:

More in our closer look segment tonight. Wisconsin Governor Scott Walker is proud of the amount of taxes he has cut in his six years in office, but he hasn’t cut taxes more than all other governors during that time. That would be Kansas Governor Sam Brownback who said his state would prove big tax cuts lead to economic growth. It didn’t. After six years of state deficits leading to budget cuts, last month Republicans in the Kansas legislature voted to raise taxes and then voted to override the governor’s veto. A recent study says the tax cuts in Kansas and Wisconsin did not spur growth and may have harmed economic performance. We’re joined now by one of the authors of the study, Dan Rickman a professor of economics at Oklahoma State University. Thanks for your time today.

Dan Rickman:

Thank you. Glad to be here.

Zac Schultz:

Wisconsin and Kansas were just two states of a handful of states were new Republican governors decided to lower income tax rates. Kansas is the most studied. But why did you include Wisconsin in your analysis?

Dan Rickman:

Well, Wisconsin was fairly notable as well because he came in not only with the tax cuts but as you know, he enacted a number of other changes in governance. So it was high visibility. To be quite honest, Wisconsin is my home state. So I wanted to have more than one state. I wanted to take two states that were very notable for their experiments and see how they fared.

Zac Schultz:

Your paper found the overall conclusion is “the fiscal experiments did not spur growth and if anything harmed state economic performance.” How did you reach that conclusion?

Dan Rickman:

Well, what we did was create a counter-factual experiment. So when they enact these policies, we only have one observation, is what they do, and we can observe that in real time. But what we can ask is what would have happened had they not enacted those policies? So what we do is we create a comparison that we call a counter-factual comparison. What would have happened had they not done that? And to do that, we use states that are similar in economic structure. We created an index that mimics Wisconsin's behavior up until 2011 and then see how Wisconsin compares to the index post-2011.

Zac Schultz:

Wisconsin did not under-perform as much as Kansas did. Is that because Wisconsin didn’t cut taxes as much? Is it that simple?

Dan Rickman:

Mostly that’s it. They did not enact as great of tax cuts as Kansas did.

Zac Schultz:

Now, state spending and higher taxes are important. Why don’t states with the highest taxes have the best economies? Is there a balance they should be looking for?

Dan Rickman:

Well, there is a balance. You have to balance the negative aspects that you can get from higher taxes. Higher taxes can discourage savings, can discourage business formation. But, on the other hand, state spending on education and highways are important components of growth. So you really have to balance the two. So what you try to avoid is erring too much on either side.

Zac Schultz:

First you wanted to compare Wisconsin and Kansas to neighbor states Minnesota and Nebraska. In your study you say that didn’t work. Why is that?

Dan Rickman:

Well, to create these experiments what you want is a comparison that behaves the way the state does prior to the governor taking office. Minnesota out-performed Wisconsin prior to 2011. So they may not be a fair comparison. We also looked at Nebraska compared to Kansas and Nebraska out-performed Kansas prior to 2011 as well. So what you want to do are create this index to compare two economies that behave and perform similarly to Kansas and Wisconsin prior to 2011 and are more similar in economic characteristics. Our index is based on states that are more similar to Kansas and Wisconsin than Minnesota is to Wisconsin or Nebraska is to Kansas.

Zac Schultz:

Now, you ultimately used something called the synthetic control method, which I assuming is the index you’re referring to, and that weighted comparison of other states. For people that want to believe that tax cuts do promote growth, how do you convince them that synthetic control isn’t just a made-up formula that will produce the results you’re looking for?

Dan Rickman:

Well, you have no control over which states it creates. The only thing you can control are the states it considers. So we allowed it to consider all states for comparison other than energy states for the obvious reason the energy sector was behaving very differently during that period. So there isn’t anything prior to 2011 that we’re imposing. That’s totally up to what we use in terms of the statistical analysis to select the states. And the weights that they give each of the states in correcting the index.

Zac Schultz:

Now, Wisconsin people love to compare themselves to Minnesota, including in government and the legislature. But the synthetic control found the best comparisons were Iowa and Indiana, not Minnesota. So is that based on how the economies perform, what the economies are made up of?

Dan Rickman:

Both. So Minnesota has a more educated labor force, particularly they have more college-educated individuals than Wisconsin does. There is less manufacturing than Wisconsin. They’re a little bit more urban. So the synthetic control created this average of states in the index that are more similar to Wisconsin in those respects. And the same for Kansas. It selected states that were more similar as an average than Kansas — I mean than Nebraska for Kansas.

Zac Schultz:

And Governor Walker has recently been promoting Wisconsin's low unemployment rate. Is that unaffected by fiscal austerity or would it be different if Wisconsin hadn’t cut taxes? Can you compare them?

Dan Rickman:

You can. Actually, unemployment rate is higher and poverty rate is higher, labor force participation is lower according to our analysis than it would have been had you not cut taxes.

Zac Schultz:

So your argument is that Wisconsin would be doing even better with even lower unemployment?

Dan Rickman:

Yes. I mean, we estimate unemployment would be lower. Labor force participation would be higher. Poverty rate would be lower. You would have created about 30% more jobs from 2011 to 2015 period had they not cut taxes.

Zac Schultz:

And is that just income taxes or can all other taxes be included in that argument?

Dan Rickman:

All of it’s included. So everything that they enacted is considered in this analysis.

Zac Schultz:

What about at the national level? Obviously Republicans in Congress would love to cut taxes similar to what Governor Walker, Governor Brownback did. Can you make a different argument for state versus state versus a national picture?

Dan Rickman:

Yes. It’s somewhat different at the national level. At the state level we expect stronger supply responses because it would be easier to move across borders of states than the nation. But on the other hand, at the state level you can’t print the money as we call it, run the deficits. So the national level doesn’t necessarily have to cut the spending in response to the tax cuts. So they may not get the negative short-term effects that Wisconsin got because Wisconsin and Kansas both had to cut their spending.

Zac Schultz:

What kind of pushback are you getting from people about this study? Because obviously there are some people in the political spectrum that say, “Yes, I believed this all along.” And a lot of others who say, “This is not at all what we believe.” There must be something wrong with the study.

Dan Rickman:

Well, the pushback hasn’t come back against us. In the policy circles, it’s really argued from an ideological perspective, so we really haven’t had pushback in the study itself.

Zac Schultz:

And do you have more studies like this in mind? Are you looking at other states? Will you continue to monitor Wisconsin and Kansas?

Dan Rickman:

We'll continue to monitor Wisconsin and Kansas. We’re doing some similar work for Oklahoma, but it’s somewhat different because we’re trying to examine energy states now.

Zac Schultz:

All right. Thank you very much for your time, Dan Rickman, from Oklahoma State.

Dan Rickman:

My pleasure. Thank you.

Zac Schultz:

Speaking of state budgets, in our Wisconsin Look our state is one of the few without one two weeks into the new fiscal year. The sticking point is transportation funding. Senate Republicans have mostly fallen in line with Governor Walker’s demand for no new taxes or fees. Instead they want to borrow more than $700 million to keep construction projects on course. But Assembly Republicans, led by Speaker Robin Vos, say it’s more conservative to pay as you go than to borrow. If there is no new revenue, there should be no new borrowing. Residents in southeastern Wisconsin are still recovering from severe storms this week. Governor Walker declared a state of emergency for Kenosha, Racine and Walworth counties due to massive flooding from the Fox River. Residents living near the river have been evacuated. But luckily, no one has been hurt. Governor Walker visited the city and activated 85 National Guard troops to assist clean-up throughout the region. And that’s all for tonight’s program. I’m Zac Schultz. Frederica Freyberg returns next Friday night. Have a great weekend.

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Funding for “Here and Now” is provided, in part, by Friends of Wisconsin Public Television.