This month’s races for governor sent a widely noted message that Republicans will do much better if they nominate center-right candidates like New Jersey’s Chris Christie than far-right candidates like Virginia’s Ken Cuccinelli.
Less remarked was the message that the New Jersey race sent to Democrats. It is not often that a state votes for a Democratic president by nearly 18 percentage points one year and then for a Republican governor by an even larger margin the next.
One lesson is that public disgust with government — and particularly government spending — includes anger over the unaffordable sweetheart deals that states and localities signed with public employee labor unions, a core Democratic constituency.
OPPOSING VIEW: Don’t demonize public pensions
A good bit of Christie’s appeal stems from a pension overhaul he engineered that pushes back retirement ages and requires workers to contribute more. Similarly, in Wisconsin, Republican Gov. Scott Walker faced down public-sector unions and survived a recall election. “Wisconsin’s pension system is the only one in the country that is fully funded,” Walker writes in his bookUnintimidated, which comes out today.
Fueling taxpayers’ anger is that they are financing benefits no longer available to most private-sector workers. Some state and local government workers can retire in their 50s, after 33 years of service, and continue drawing the same income.
Estimates for the total shortfall of public pensions start at about $700 billion. In 2011, the Congressional Budget Office said that $2 trillion to $3 trillion was more accurate. Even a long bull market won’t make the problem go away.
Some of the pension shortfall is the result of governments not putting as much into the plans as they promised. But a prime reason that pension costs have spiraled out of control is that spineless public officials buy votes by creating liabilities that won’t come due until long after they leave office.
If Democrats become the party that ignores this crisis, they will face a lot more New Jerseys and Wisconsins in their future. Democrats aren’t the only ones who have created extraordinary pension liabilities, but most of the states and cities in trouble have gotten where they are under Democratic leadership.
Detroit is Exhibit A for municipal irresponsibility. It negotiated generous pensions, even overpaid in some cases, as the city began its long descent into bankruptcy. Illinois tops most lists of states in trouble.
Some Democratic officeholders see the growing resentment against public-sector pensions and are trying to get in front of the issue. The mayor of San Jose, Calif., Chuck Reed, is leading an effort of Democratic mayors to amend his state’s constitution to allow cities to renegotiate pensions of current employees for future years worked.
For Democrats, the choice is clear. They can let their communities fall deeper and deeper into debt. Or they can lead on the issue, and even make a progressive case for pension reform. Excessive retiree benefits — which account for 20% of San Jose’s $1.1 billion budget, for instance — drain governments of the money needed for education, housing, parks and public safety.
If Democrats don’t take on this issue, they will see their communities deteriorate. They will also invite more Republicans like Chris Christie to come in and begin the work that they refuse to do.
Courtesy of USA Today