October 27, 2013

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The Issue That Divides Dems: Public Pension Reform (Carl M. Cannon, October 27, 2013, Real Clear Politics)

The Democrats' theater of battle is not primarily in Washington--it's the state capitals and cities--and the issue is public employee pension reform. It's not a sexy subject. Even ominous actuarial tables are more likely to induce glazed eyes and yawns than memorable battle cries. Yet what up for grabs is the very quality of life in some of America's most iconic cities and suburbs.

Typically, reform is being led by Democratic mayors. It's being resisted by leaders of public employee unions, who are also Democrats. California state legislators tend to side with the unions over the mayors, preferring the status quo--and the campaign contributions from unions--to an intramural fight.

The problem, however, is that the status quo will not hold any longer. Detroit is virtually a one-party city. It has also filed for bankruptcy. These two facts are not entirely coincidental. Five decades' practice of awarding generous pension benefits to city employees, even while Detroit was in the process of losing two-thirds of its population and slashing the workforce, has left the city with a budget in which 40 percent goes to paying former workers--with long-term obligations to these retirees approaching $44 billion.

Even as the city faced bankruptcy, the unions were disinclined to negotiate any changes in their contracts, preferring to fight in court, which is where matters stand today: a trial began in federal court in Michigan this past week. Litigation is also where the city of San Jose, Calif., is headed.

Last year, under the urging of Mayor Chuck Reed, San Jose's city council put a ballot measure before voters that limited pensions for new employees, gave employees the choice of either contributing more to their pensions or accepting a lower-cost plan, required retired employees to kick in higher health care premiums, and gave the council control over cost-of-living adjustments. This measure was put before voters--Democratic "blue" voters in a "blue" city in "blue" California--who passed it with nearly 70 percent support.

So everyday Americans get it--they understand math--even if union leaders and their enablers in state government do not. 



Posted by at October 27, 2013 8:29 AM
  

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