A glimpse into the public-union mind-set
Rhode Island’s Democratic state treasurer, Gina Raimondo, is fond of saying that pension reform is about math, not politics. Other blue-state politicians, ranging from New York governor Andrew Cuomo to Chicago mayor Rahm Emanuel, have moved toward fixing unsustainable pensions. But California’s top statewide political leaders have mostly shrugged
at the problems caused by excessive pay and benefit packages granted to
public-sector workers. The state faces an unfunded pension liability of
at least $300 billion, and major cities—notably Stockton and San Bernardino—are taking the municipal-bankruptcy route; even Los Angeles
is mulling the option. Until recently, even the most modest reforms to
California’s public-employee compensation have gone nowhere—and though
Democrats are now suddenly talking about tackling some kind of pension
reform within the next four weeks, history suggests that it’s wise to be
skeptical.
What is it about California’s Democratic leaders that makes them
ignore fiscal reality and put politics above mathematics? Conventional
wisdom holds that unions elect these politicians and that the
politicians do the unions’ bidding. But in reality, the unions are
the legislature. Most of the Democratic leadership in the state
assembly and senate comes directly out of the union movement and
identifies with the public sector. For these union Democrats, government
is primarily a means to improve the financial condition of those who
work for the government.
The best articulation of this vision can be found in a speech that
state treasurer Bill Lockyer gave last October. “As a California public
official, I also believe in the principle that our nation and our state
have an absolute obligation, to every American and every Californian, to
ensure that when the time comes for them to put down the tools and
enjoy a well-deserved retirement, those workers can live the rest of
their lives with dignity and good health, and not in poverty,” Lockyer
said. “And in my view, nothing is more important in providing for
retirement security than preserving the defined benefit pension for
those who have it, and restoring and reinvigorating the defined benefit
leg of the three-legged retirement stool for those across the country
who have lost it in the space of a few short years.” Lockyer conceded
that “pension liabilities are a problem,” but only because “they
are driving unacceptably high contribution rates for employers and
workers, too.” In other words, public pensions are a concern not because
of the costs to taxpayers but because of the burden they place on
government agencies and government employees. To ease that burden, union
Democrats want—what else?—new taxes.
Sacramento Bee reporter Jon Ortiz, who covers state workers
and unions, wrote that Lockyer’s speech “echoed the new argument that
public employee unions are making in defense of retirement benefits.”
And this year, the public got to see an incongruous legislative
manifestation of Lockyer’s argument. Los Angeles Democrat Kevin de
León’s Assembly Bill 1234 would have the state, in effect, create a
miniature Social Security system designed to bolster private
retirement accounts—albeit at a much lower rate of return and with much
lower benefits than those enjoyed by retired public employees. De León’s
bill passed the state senate and awaits a hearing before the assembly’s
appropriations committee—incredible as it may seem, given the
legislature’s refusal to give public-pension reform any serious thought.
The reason for the de León bill is union Democrats’ belief that the
pension problem is merely, as Lockyer puts it, “a very serious and
virulent strain of pension envy.” Instead of fixing the unsustainable
public-pension system—which they regard as a success that has helped a
portion of the public receive the kind of comfortable retirement that
everyone should have—the union Democrats want to throw a few bones to
private-sector workers afflicted with this “pension envy.”
Lockyer’s intransigence illustrates why San Jose mayor Chuck Reed
says that getting any reform out of Sacramento is hopeless. Reed, of
course, spearheaded a successful pension-reform ballot initiative that
unions are now challenging
in court. If pension reform succeeds in the Golden State, it will
happen at the ballot box—in spite of the best efforts of union
Democrats, who continue to defend the indefensible.
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