Unions block Texas privateers: Labor blocks Lockheed scam

by Tim Wheeler & W. H. Rogers

This article was reprinted from the May 17, 1997 issue of the People's Weekly World. For subscription information see below. All rights reserved - may be used with PWW credits.

AUSTIN, Texas - Texas state workers and the working class in general won a major victory when President Clinton rejected a key part of Gov. George W. Bush Jr.'s plan to turn over to private contractors delivery of public assistance, food stamps, Medicaid and other benefits.

The plan, known as the Texas Integrated Eligibility System (TIES) would have permitted the state to seek bids from private contractors to operate its welfare system. It would have cost Texas taxpayers more than $2 billion over the next five years and eliminated about 13,000 state jobs.

The plan would allow private corporations to administer $8 billion in benefits from two dozen federal programs. The contractor would also determine eligibility.

Companies such as Lockheed Martin, EDS, and Andersen Consulting were preparing to bid on the project, but the plan first had to be approved by the Clinton administration. On May 2 officials of the U.S. Department of Health and Human Services (HHS) informed Texas that state, not private-sector, employees must screen applications for Medicaid and food stamps under federal law.

A joint effort by local and national unions led the fight to stop this massive giveaway. The Texas State Employees Union, affiliated with the Communications Workers of America (CWA), joined by other organizations, refused to back down when it looked like Bush's plan would sail through unobstructed.

The movement here kicked up such a storm that the protest reached Washington. President Clinton met earlier this month with four labor leaders including AFL-CIO President John Sweeney and Gerald McEntee, president of the American Federation of State, County and Municipal Employees. McEntee warned Clinton the Texas plan "would set an incredibly dangerous precedent all across the country."

After hearing their views, Clinton rejected not only the Bush plan but also a scheme drawn up by Bruce Reed, Clinton's domestic adviser, who urged a "a compromise position which would give Texas the opportunity to seek a partially privatized integrated system."

McEntee, speaking later to reporters, blasted Reed, "I don't think he's concerned or helpful to the workers in America and I think the President listens to him," McEntee said.

Lynn Rhinehart, an attorney in the AFL-CIO's legal department said, "We're very pleased. This definitely represents a slowing down of the privatization train. Public benefit programs deserve public accountability and private corporations cannot provide that."

A particular concern was that the Texas plan would turn over to private corporations decisions on the eligibility of people to receive benefits. "Questions of eligibility ought to be in the hands of public employees,." Rhinehart said.

William Brown, president of the Austin AFL-CIO, himself a CWA member, told the World, "This is an important victory. Whether it is coming from the federal, state, or local government, privatization takes away from the intent of the programs to serve the needs of people. There would be cuts in the services and benefits provided and those Texas State employees who serve the people would lose their jobs."

Rosie Torrez, TSEU legislature representative, told the World, "Somewhere along the line, this welfare overhaul turned into a way of making money, lining the pockets of private contractors ... Here are people who have lost their jobs. They are at their wits' end. And when they call the state for help they reach a Lockheed caseworker who may live in South Dakota."

TSEU members, reinforced by contingents from the NAACP, the Mexican American Legal Defense Fund and the National Organization for Women, staged a rally of more than 1,200 people on the Texas State capitol grounds April 16 to protest the privatization scheme and to demand a $200 a month pay raise for state employees.

Last summer the union held its first rally against the plan and last fall it asked the Travis County Attorney to investigate the possibility of a conflict of interest by lobbyists for Lockheed, EDS and Andersen Consulting who may have worked for the governor or other agencies involved in the privatization scheme.

Bush accused Clinton of "capitulation to the union bosses." He announced that his administration will attempt to circumvent Clinton's order. Republican leaders in Congress threatened to push through legislation permitting the Bush plan.

Trade unionists and other progressives here in Texas are under no illusions. With the enormous profits to be reaped from privatization, the struggle against the Bush plan must continue.