This past February, at the Conservative Political Action Conference (CPAC) outside Washington, D.C., Wisconsin Governor Scott Walker rolled up his sleeves, clipped on a lavalier microphone, and without the aid of a teleprompter gave the speech of his life. He emerged from that early GOP cattle call as a front-runner for his party’s nomination for president. Numerous polls this spring placed him several points ahead of former Florida Governor Jeb Bush, the preferred candidate of the Republican establishment, in Iowa and New Hampshire. Those same polls showed him with an even more substantial lead over movement conservative favorites such as Ted Cruz, Rand Paul, and Mike Huckabee. In late April, the Koch brothers hinted that Walker would be the likely recipient of the nearly $900 million they plan to spend on the 2016 election cycle.
The source of Walker’s appeal—his singular calling card, in fact—is not hard to identify. In 2011, the governor signed legislation stripping most of Wisconsin’s public-sector unions of their rights to collective bargaining and to require dues from members, essentially busting those unions. He went on to survive a bitter 2012 recall effort backed by national unions and to win reelection in 2014 in a state Barack Obama won in 2012. He then signed “right-to-work” legislation that massively undercut the state’s dwindling private-sector unions, too. In his twenty-minute CPAC speech, Walker referred to his battles with labor six times directly and as many times indirectly. It is the core of his message.
It is hard to exaggerate the attractiveness of that message to Republican voters. Back in the day, progressive Republicans like Wisconsin’s own Senator and Governor Robert La Follette championed the labor movement, but today’s GOP is overwhelmingly hostile to unions. Only 44 percent of moderate-to-liberal Republicans, and 23 percent of conservative Republicans, have a favorable view of labor unions, according to the Pew Research Center. By contrast, 70 percent of moderate-to-conservative Democrats and 80 percent of liberal Democrats rate unions favorably. Union support is one of the biggest wedge issues.
In his CPAC speech and subsequent ones, Walker likened his clash with Wisconsin’s public-sector unions to Ronald Reagan’s 1981 firing of 11,000 striking air traffic controllers, thus presenting himself as a rightful heir of the party’s patron saint. He extended that connection to foreign policy. A few days after his CPAC speech, Walker told a Palm Beach Club for Growth audience that Reagan’s firing of the controllers was “the most significant foreign policy decision of my lifetime” because “it sent a message around the world [that] we weren’t to be messed with.” Walker’s similar toughness under fire with the unions, in other words, makes him ready to be commander in chief. “If I can take on 100,000 protesters,” he told the crowd at CPAC, “I can do the same across the world.” The mainstream press treated such comparisons as bumbling efforts to cover the fact that, as a governor and former county executive, he has scant foreign policy experience. But conservative audiences loved the show of resolution. Walker wants tough strength to be his calling card; his campaign book is called, not coincidentally, Unintimidated.
What GOP primary voters most want is a candidate who will not compromise on conservative principles but can still win a general election. That’s where Walker’s triumph over public-sector unions really helps him. He not only stood up to big labor, he points out, but politically lived to tell the tale, winning a recall election in 2012 and reelection to a second term in 2014. “We did it without compromising,” he told CPAC:
We took on the powerful special interests in Washington and we returned the power back to the hand of the hardworking taxpayers. They didn’t like that. They tried to recall me. They made me their number-one target. But in the end we showed them we can fight and win for the hardworking taxpayer.
It’s obviously too early to know who will ultimately become the GOP nominee. The field of candidates is crowded. The debates are months away, and Walker has real vulnerabilities. His flip-flops on key issues like immigration have already hurt him among some conservatives. His poll ratings in his home state have fallen and his national poll numbers weakened in the late spring. His claim to special status as a conservative who can win in a blue state is also questionable. Two of his three statewide electoral victories occurred during off-year elections (2010 and 2014), when GOP voters typically predominate, and his 2012 recall victory was colored by the fact that voters were being asked to overturn the previous year’s election results over a policy dispute, which, according to exit polls, many of them thought was inherently unjust.
But let’s presume he does become the nominee. Walker’s triumph over the unions could continue to be a useful tool for him, not only in firing up the GOP base but also in reaching out to independents, 47 percent of whom take a dim view of unions, according to the same Pew poll, and even to persuadable Democrats. The 2016 elections will be a battle over the role of government in failing to spur a too-weak economy and boost stagnant incomes. The Democratic nominee will likely present herself (or, less likely, himself) as a champion of the middle class who will wrest control of government away from the big banks and other powerful corporate interests and use it to benefit average Americans. Walker will be armed with an equivalent reform narrative. The problem with government, he can say, is not just that it is too big, holds back private-sector growth, and robs us of our freedoms—the standard Republican view, which he tirelessly proclaims—but that it has been captured by its own employees, who run it for their own benefit, not the public’s. Just as he took on the unions in Wisconsin, he can say, so will he take on the bureaucrats in Washington, returning power back to “the hardworking taxpayers.”
So it’s worth looking carefully at Walker’s arguments for why he busted the state’s public-employee unions. To what extent were those unions the obstacle to getting the state’s fiscal house in order—a key argument Walker made during the 2011 standoff? To what degree do state and local government employee unions drive government’s costs up and push its performance down?
Even more important is the question of how Walker’s experiences and management choices at the state level might translate at the federal level. Is a governor whose greatest accomplishment is the crushing of state and local government unions the right person to lead the government in Washington?
The marble rotunda of the Wisconsin state capitol building is a cacophonous place if there’s any kind of noise inside. School tours, for instance, make it impossible to carry on a conversation. And in February 2011, when Scott Walker announced in the first weeks of his term that he would push through a budget-repair bill that would deal with short-term budget issues—and take long-term aim at Wisconsin’s public employee unions—the din was unimaginable. Tens of thousands of employees, mostly teachers, police officers, and firefighters, descended on the capitol in a series of demonstrations that went on for weeks. Those who could get inside beat drums and sounded air horns. Those who couldn’t get in marched outside, even on frosty Madison winter weekends.
Republicans held the governorship, assembly, and state senate, but passage of the budget bill needed enough Democrats present to make a quorum. Fourteen senate Democrats fled the state to prevent action. State police were sent to their homes to find them, especially after reports surfaced that some Democrats were sneaking back late at night and on weekends, but the senators eluded both the police and the Republicans. They holed up at a hotel just south of the Illinois border and strategized over how to stop Walker’s union-busting plan.
The most important part of Walker’s proposal radically changed the rights of the state’s public employee unions. The proposed law would limit collective bargaining to wages, and increases could not exceed the rate of inflation. Contracts would be for just a year, and unions needed to win an annual vote to stay certified. Most important, employers—that is, state and local governments—could not collect union dues and workers would not be required to pay them. Law officers and firefighters would be exempt. The proposal especially targeted local education unions, which had been a nagging thorn in the Republicans’ sides for decades.
Walker pushed his plan, he told David Gregory on Meet the Press, because “collective bargaining does have a cost.” He pointed to the time when, as Milwaukee’s elected county executive, he asked the local public-employee union to accept a reduced 35-hour workweek to avoid layoffs and furloughs for everyone. The union’s reply, he said, was “Forget it.” Now the state was facing a tough budget, and he told Gregory that layoffs would be necessary if he couldn’t get his plan through the legislature. It was, he said, “our moment in Wisconsin’s history.”
The Democrats refused to budge from their Illinois hideout, so Republican legislators decided to outflank them. They stripped the budget pieces away from the bill, which left only the union-busting bits and removed the quorum requirement, allowing the Republicans to pass the bill without getting the Democrats back to Madison. As he signed it, Walker said he was proud to “lead the way … to get Wisconsin working again.” But he wasn’t shy about claiming a broader victory to “ultimately inspire others across this country state by state and in our federal government,” he told reporters. In just his first three months in office, he had come to see this “as part of our legacy.”
Almost no one saw this anti-union attack coming. Walker’s 2010 gubernatorial campaign focused on a pledge to create 250,000 new jobs in his first term (job growth fell far short, at 145,000 new jobs). There were hints that he planned to free local governments from being “strangled” by mediation with public employee unions and that he wanted to increase local governments’ flexibility in negotiating health plans. But it wasn’t until a press luncheon a month after his election that the full union strategy began to come into focus. He told reporters that “we are going to look at every legal means we have to try to put that balance more on the side of taxpayers and the people who care about services.” The union leader Bryan Kennedy worried that Walker planned “to make state employees the political whipping boy for the state of Wisconsin’s economy”—and he was right.
Walker wasn’t done. In early 2015, he championed a right-to-work bill to end the requirement that employees join unions or contribute union dues as a condition of employment. Just as in 2010, he hadn’t campaigned on the proposal in the election months before. In fact, even after the election, he said about the bill, “I think it’s a distraction.” This time around, the right-to-work bill was a favorite of Republican legislator leaders, but, as the train charged out of the station, Walker happily climbed aboard the engine. He was happy to claim victory, but he got lots of help from conservatives in the capitol. In Slate, Betsy Woodruff wrote, “Without the Wisconsin state Legislature, Walker would just be a skinny Chris Christie.”
For decades, Wisconsin had been one of the national leaders in union organizing of the government workforce. AFSCME, the largest government-employee union, began in Madison in 1932.
But by the time Scott Walker was elected, their ranks had long stopped growing. Public-employee union membership in Wisconsin hit a high point in 1999, with almost 58 percent of the state and local government workforce belonging to unions. Membership bounced up and down with the election cycle for the next 20 years—until Walker’s effective assault in 2011. As the graph below shows, union membership dropped from 50 percent of all state and local employees to 31 percent in just four years.
As the same chart shows, state and local government union membership nationally has been flat for four decades. If union power is a problem for government, it’s one that hasn’t, by that measure, been growing. Indeed, as a share of overall state-government spending, wages and benefits for public employees have been declining.
When he came to office in early 2011, amid a national recession and the end of the federal stimulus, Walker faced large budget deficits. He targeted union power as the core of the problem. “For us, this is about balancing the budget,” Walker told Fox News Sunday’s Chris Wallace at the time. “We’ve got a $3.6 billion budget deficit. We are broke.” Closing that deficit can’t be done, he insisted, “with the current collective bargaining laws in the state.”
But was collective bargaining really the problem? That year, George Washington University political scientist John Sides released a study comparing the fiscal conditions of states with high and low percentages of union households and found no correlation. “States with larger unionized workforces do not have larger budget deficits,” he wrote. A follow-up study by the Institute for Research on Labor and Employment at the University of California, Berkeley, added collective bargaining to Sides’s calculations and got the same result: States where unions had strong collective-bargaining rights did not have bigger deficits than states without such protections.
The new labor law Walker ultimately signed did help the state and local governments extract approximately $3 billion in labor givebacks, largely through high employee contributions to their pensions and health benefits. But other states also closed large budget deficits that year. Some, like Connecticut and Rhode Island, did so by winning large labor concessions, but through old-fashioned hard bargaining and political compromise. The unions in those states retained their collective bargaining rights. Indeed, early in the negotiating process with Walker, union leaders said they would concede to his demands for higher employee contributions to pensions and health care if he would drop his insistence on gutting collective bargaining. The governor said no.
Walker’s argument for why unions should lose power wasn’t solely premised on the need to close budget deficits. He also appealed to basic fairness. “We can no longer live in a society where the public employees are the haves and taxpayers who foot the bills are the have-nots,” he proclaimed. The implication was that government workers, through their unions, were extracting pay and benefits that average taxpayers, living in the “normal” market economy, could never expect and shouldn’t be forced to pay for.
Are unionized government workers overpaid relative to what they could expect to earn in the private sector? As it happens, there is a substantial literature on that subject.
In a fascinating 2012 paper in ILR Review, three professors of business, David Lewin of UCLA, Jeffrey Keefe of Rutgers, and Thomas A. Kochan of MIT, reviewed that literature and conducted their own analysis of data sets on wages and benefits. On average, counting wages as well as retirement and other benefits, they found that, compared to private-sector employees, state and local government employees are undercompensated by 5.6 percent, with the gap smaller for local government employees (4.1 percent) than for state employees (8.3 percent).
The authors also confirmed a connection, observed in many other studies, between education and pay. Put simply, the higher the education levels of public servants, the less they are paid relative to what people with the same levels of education earn in the private sector. On the other hand, those government workers with lower levels of education tend to be paid the same or more than they would make in the private sector.
That’s not to say that unions don’t boost the pay of government workers. They do, though not as much as you might imagine. According to the authors, government unions on average provide their members with 3.7 percent higher pay—significant, but a fraction of the 14.1 percent wage bump private-sector unions win for their members.
Walker aimed his attack at public-employee unions—and especially at the state’s teachers’ union, which had long been the most powerful union in the state, had long supported Democrats, and had represented some of the local governments’ most-educated public employees. Their pay was lower than the national average, according to the annual report by the National Education Association, at $54,535 in 2014-15, compared with the average national salary of $57,379. At the time of the 2011 battle with Walker, teachers’ salaries had risen faster than the national average over the previous decade, with a 29 percent increase compared with a 23 percent increase nationwide, but the average salary ($53,792) was still less than the national average ($55,418).
Do strong teachers’ unions drive up salaries? The Thomas Fordham Institute, a conservative Washington-based think tank, produced a 2012 study assessing the strength of teachers’ unions. Comparing the ranking of states by union strength with the salary increases for teachers in the last decade (from 2004 to 2014), it’s hard to make the case that the unions are a powerful engine driving up salaries (see the chart below). In fact, the state with the smallest increase (Illinois) has some of the strongest unions, and the state with the biggest increase (Wyoming) has only modestly strong unions.
Unions do matter, of course. Teachers wouldn’t invest so much energy in them if they didn’t believe they did. In Wisconsin, the teachers’ union was especially successful in getting many districts to pay the teachers’ share of contributions to the state pension system, to the tune of more than 6 percent of their salaries. For most teachers, that ended after the passage of Walker’s bill. But many other factors besides union bargaining determine teachers’ salaries, and they often count much more. Teachers in Pittsburgh make more than twice as much as teachers in Newark after accounting for differences in the cost in living, according to a 2014 study by the National Council on Teacher Quality (NCTQ). In Boston, it takes teachers seven years on average to reach a salary of $75,000. In Wichita, it takes more than thirty years. The chart above captures the role that unions pay in shaping teachers’ salaries—but it shows that other forces matter much more. The NCTQ study found that teachers in Milwaukee and Gwinnett County, Georgia, have about the same lifetime earnings. Milwaukee’s teachers’ union has long had a strong voice. Collective bargaining in Gwinnett County is explicitly illegal.
Walker would argue that limiting pay increases isn’t the only reason the teachers’ unions needed to be cut down to size. As he explained in his CPAC speech, the real goal was getting better-performing teachers for the benefit of students: “[I]n our state, we don’t have seniority and tenure anymore. We can hire and fire based on merit. We can pay based on performance. We can put the best and the brightest in our classrooms and we can keep them there.”
Here, Walker was speaking the language not just of conservative Republicans but of many reform-minded Democrats who have long complained of teachers’ union resistance to charter schools and other innovations that threaten union power but have been shown, in some places at least, to boost student outcomes (see David Osborne, “How New Orleans Made Charter Schools Work,”).
Walker, however, hasn’t done much as governor to advance such reforms (his focus has been on increasing funding for vouchers and opposing Common Core standards). Moreover, in comparing the strength of teachers’ unions with overall K-12 achievement (as ranked by Education Week in its annual survey), it’s hard to make the case that states with stronger unions have lower achievement, as the chart below shows.
But Walker didn’t target all public employee unions. His plan allowed police and fire unions to continue to bargain over wages and benefits—and they were exempt from the cuts in government-funded benefits that reduced the take-home pay of teachers and many other public employees. If the goal was to help taxpayers and to get out of the way of market forces on wages, then the first step would have been to remove union protection from groups that are farthest out of sync with the private sector. As Lewin, Keefe, and Kochan show, the pay gap between the private and public sectors tends to be greatest for those with the highest levels of education and lowest for those with the lowest levels of education. According to the U.S. Bureau of Labor Statistics, the jobs of police officers and firefighters have entry requirements of a high school education, compared with at least a bachelor’s degree for teachers. But the firefighters and police officers were exempt, while teachers took the brunt.
In the end, gutting union power allowed Walker to save the state about $3 billion over his first term. Most of the savings came from passing more of the cost of fringe benefits from taxpayers to employees, and two-thirds of that came from higher employee contributions to pensions. In the first two years after the law passed, the tax-watchdog group Wisconsin Taxpayers Alliance found, average teacher salaries were flat but take-home pay dropped by 16 percent, as a result of the shift in the cost of fringe benefits.
Not a nickel of that money, however, went to shoring up the state’s long-term pension obligations. Anyone who studies state and local government finance knows that the next big crisis is the sorry state of most state pension systems. Walker, however, didn’t have to worry about that, because he inherited the nation’s strongest state pension system, with 99.8 percent of its obligations funded.
This may strike many readers as odd, since conventional wisdom holds that pressure from public-sector unions is behind the vast unfunded deficits in state pension systems, with Illinois’s nearly insolvent system being the prime example. But as the next chart shows, there is no connection between the strength of unions and the fiscal health of state pension systems. Some states, like Wisconsin, whose unions were ranked as the eighteenth most powerful in the country before Walker arrived in the governor’s mansion, are in fine shape. Other states with weak government unions are in terrible shape. South Carolina, for instance, has the second-least-powerful public-sector unions in the country and only 66 percent of its pension obligations are funded. It turns out that elected leaders, regardless of their state or party, are good at finding ways to underfund their pension systems, since doing so takes pressure off today’s budget while pushing the pain off into the future.
To what extent, then, did Walker’s crushing of the unions help Wisconsin’s “hardworking taxpayers”? The $3 billion he saved in his first term was certainly something. But that amounted to less than 1 percent of overall state and local government spending over that time period. Those savings came from the pockets of teachers and other public servants who are also taxpayers and whose compensation, by most measures, was not out of line. The law Walker signed didn’t contribute to the fiscal health of the state’s public pension fund. It provided management flexibilities that could ease school reforms down the road but that the governor himself hasn’t taken much advantage of. And, as we’ve seen, Walker could have won most or all of that $3 billion through tough negotiating without going for the jugular and virtually eliminating collective bargaining. Why, then, did he do it?
It’s tempting to portray the struggle over Wisconsin’s unions as a matter of high policy. In reality, however, it was the culmination of decades of increasingly fierce partisan wrangling that pitched the state’s Democrats, along with their union supporters, against resurgent Republicans and their allies in the business community.
In the previous 20 years, there had been other epic battles, but none was bigger than the 1998 campaign for State Senate District 27, located in a Madison suburb. The race pitched Democrat Jon Erpenbach, a former legislative aide, local radio personality, short-order cook, and truck driver, against Republican Nancy Mistele, a local business operator and prominent conservative activist. Both sides expected that the race would decide control of the Wisconsin state senate, which had been tilting back and forth and was then in Republican hands. With Republican Tommy Thompson in the middle of his 14 years as governor, the Democrats saw control of the senate as critical in regaining their power in the state—and Erpenbach’s race as critical to senate control. For the Republicans, it was their golden opportunity.
It was a big-money campaign, at least for those times and for a state legislative race. Erpenbach raised $188,000, but Mistele vastly outspent him with the $307,000 she collected. She also had big help from Wisconsin Manufacturers and Commerce (WMC), the state’s chamber of commerce, which spent an estimated $200,000 in issue ads. But the state’s major public employee union, the Wisconsin Education Association Council (WEAC), jumped on Erpenbach’s side with an estimated $362,000 of its own issue ads. Issue-ad spending swamped the candidates’ own campaigns, and, as Erpenbach later told a reporter, “The campaign was totally out of my control.” In fact, he said, he felt like a “bit player” in his own campaign.
In the following years, WEAC and the WMC became stalking horses for the Democratic and Republican establishments, and the groups fought proxy battles for the parties on the state’s biggest issues.
Erpenbach may have lost control of his campaign, but with WEAC’s money he won the race. The Democrats controlled the state senate, the seeds were planted to make issue ads an unstoppable national force, and the fight between WEAC and the WMC became a blood feud.
In the following years, WEAC and the WMC became stalking horses for the Democratic and Republican establishments, and the groups fought proxy battles for the parties on the state’s biggest issues. WEAC was the most powerful voice of public employee unions in one of the most important swing states in the country. The WMC was determined not to let them set the state’s agenda. The two groups may not have invented issue ads, but their rivalry brought them to a fierce level not previously seen in the country.
But not all unions suffered the same fate. The Wisconsin Troopers Association, for example, escaped most of the changes in bargaining power imposed on the teachers and won a 17 percent increase for its members in its bargaining with the Walker administration. The state troopers guarded the capitol during the 2011 fracas—and supported the governor in his 2010 campaign, the 2012 recall election, and his 2014 reelection battle. The governor’s spokeswoman, Laurel Patrick, denied that there was a connection. “This is ridiculous. To say there is a pattern of favoritism is inaccurate.” Some local police and fire unions also backed Walker—and they also found themselves far better off than the teachers’ union.
Sharp-elbowed politics is part of the American tradition. James Madison warned about the “mischiefs of faction,” and what has happened in the Wisconsin city that bears his name surely ranks among the most mischievous. But it’s awfully hard to argue that it represents a pathology of union power or that the unions had a privileged place at the table. They found themselves in a nasty blood feud and lost.
What do Scott Walker’s actions as governor say about how he might act as president if he were elected? Do his experiences busting the state’s government unions, and the instincts that led him to do so, make him the right person to take on the management challenges of the federal government? He argues that the union battles show he’s tough enough to lead, but there are much deeper issues at play here.
To begin with, whatever problems Washington has, they don’t have much to do with union power, for the simple reason that unions at the federal level don’t have much clout. They represent only 19 percent of all federal employees (compared with 42 percent of local government employees and 30 percent of state government employees across the nation, and 31 percent of state and local employees in Wisconsin). Federal unions have no right to bargain over wages; Congress sets federal pay through appropriations. Federal employees don’t have the right to strike, and never have. (The 1981 air traffic controllers’ strike was illegal under federal law, and Reagan actually provided a grace period to give them a chance to think twice before being dismissed.)
Today, the biggest problem with federal employees is that there’s not nearly enough of them. As the University of Pennsylvania political scientist and former George W. Bush White House aide John DiIulio has noted, the size of the federal workforce today remains about what it was in 1960. Meanwhile, the U.S. population has more than doubled, the federal budget has quadrupled in real terms, and the number of pages in the Federal Register has grown fivefold, as the below chart shows.
Washington has accommodated this growth largely by handing the job of managing federal programs to outside contractors. But with the same number of federal workers having to oversee ever more money and contractors, cost and quality have suffered. Year after year the GAO and other watchdogs document countless programmatic breakdowns and billions of dollars in cost overruns as a result of what I’ve dubbed “government by proxy.” The disastrous launch of the Obamacare website was a classic example. The Center for Medicare and Medicaid Services had too few employees with the right skills to manage the contractors who built the system. It’s also a good example of what can turn government programs around: The Obama administration parachuted in a couple dozen of the right people, and in a few months the website was up and running well.
If Scott Walker became president, what would his policies be toward the federal government and the people who work for it? As far as I can tell, no reporter has ever asked him. Not that he’d necessarily be very forthcoming. During his race for governor Walker gave virtually no hint that he would push to strip government unions of collective bargaining rights. As governor, he foreswore any interest in right-to-work legislation until he signed such a bill handed to him by his GOP-controlled legislature.
In all likelihood, then, a President Walker would adopt the views of his fellow Republicans in Washington toward federal workers, which these days can be characterized as “Off with their heads.” In the wake of revelations about egregious backlogs for appointments at some Veterans Affairs hospitals—backlogs caused, again, by too few federal employees, in this case primary care doctors—Senator John McCain led a campaign to make it easier to fire poorly performing federal managers, and then pressed to fire them faster. Other Republicans are campaigning to transform the Senior Executive Service into at-will employment, which would allow political officials to fire the most senior careerists without cause. Meanwhile, House Republicans are pushing to substantially downsize the federal workforce, including a plan to allow federal agencies to hire just one new worker for every three who leave. It’s easy to see a President Walker aggressively championing this agenda.
In a different era, one could imagine a kind of grand bargain emerging from such a push. Federal civil service rules do need reforming, after all. At least some Democrats would probably agree to, say, replacing lifetime employment for senior civil servants with five-year renewable contracts and much greater flexibility in transferring senior executives, in return for increases in both the ranks and pay of bureaucrats. And as John DiIulio has argued, an increase in the size and capacity of the civil service would mean fewer contractors and less wasteful spending, and hence would amount to a substantial decrease in the actual size of government.
Convincing most Republicans to see things that way, however, won’t be easy. At a minimum it would require a national GOP leader who can see past conventional ideological categories, understand the advantage of compromising with Democrats when it comes to policy on government employees, and guide his party in that direction. If Scott Walker manages to win the Republican nomination, it will be because he did precisely the opposite.
This post appears courtesy of Washington Monthly.
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