Ain't No Pension Crisis...

It's not a “Pension Crisis.” It’s a “Debt Crisis”

While the concept of the “big lie” is most often attributed to an incarcerated Adolph Hitler during his recitation of Mein Kampf, the origins of the phrase most certainly reach further back into time, and they provide an additional element: Repetition.  In fact, as far back as 1888, a schoolboy axiom was to provide not only a “big” lie, but the cheek to repeat it endlessly in order to secure its evolution from possibility to plausible certainty

(http://www.barrypopik.com/index.php/new_york_city/entry/if_you_are_going_to_tell_a_lie_tell_a_big_one_the_big_lie/).

Senator Bertino-Tarrant

In a recent response to a constituent, Freshman Senator Jennifer Bertino-Tarrant (49^th District) began her reasons for cutting pension benefits for current retirees (and possibly active workers in the public sector given House amendments) with the usual Springfield opening: “Thank you for contacting me regarding our state’s pension crisis.”  

Excuse me, Senator?  Don’t you mean “debt crisis?”

It would appear that the Senator has been duly indoctrinated by those who would create the ad hominem logical fallacy that the workers with pensions are to blame for the current shortfalls in the Illinois budget, which makes it difficult to pay for services to other areas of the state. And, I might add, Senator Bertino-Tarrant is quite familiar with the public educational system – as a principal as well as Will County Superintendent of Education.  What happened, Senator?  Was it subversion or immersion – or both?  It would appear on the surface that she has been transformed after a very short experience in the General Assembly.

Pension Crisis unfairly evokes culpability for a historically shared retirement program which is no longer acceptable to cost cutting, bottom line business corporations.  Indeed, the phrase arouses envy in many recent recession-damaged employees and non-union workers, toiling in an economy without concern or care for their lives beyond exploitation.  The words “Pension Crisis” deliberately divert the problem to a fallacious target: the current workers and retirees who still have some promises of traditional pensions.

The Chicago Tribune has been the very model of a one-note-Johnny in its use of the damaging expression “Pension Crisis.”  Even when the General Assembly stops momentarily to consider court ordered conceal-and-carry, or marriage equality, or even medical marijuana; the Chicago Tribune can be counted upon to apply the broad brush, which makes pensions themselves the issue – NOT the Debt Crisis owed for not having made payments for many decades.    

This kind of phrasal finger pointing plays well in a business and economic climate where, according to a recent Frontline program, nearly 35% of Baby Boomers have no retirement savings whatsoever.  Those who do (nearly 60 million) have watched their 401k programs eviscerated by Wall Street managed market disasters – if they were lucky enough to have one (The Retirement Gamble).  The emergence of 401k programs in the mid 1980’s put all the risks in the hands of the workers, not the employers, and the waiting financial industry made money despite the good times or bad times. 

Senator Daniel Biss employs the “pension crisis” refrain constantly at town hall meetings and in newsletters to constituents: “The pension crisis is perhaps the most prominent fiscal challenge facing our state today; it puts an incredible amount of pressure on our budget, while simultaneously putting at risk the retirement security of teachers and other public employees”(http://danielbiss.com/node/123 ).  

He goes on, “If we avoid taking the difficult steps necessary to fix our pension system, the growing cost would consume so much of the state budget that we would be unable to fund any other sector of government, including human services, health care, infrastructure, public safety, education -- and eventually -- the salaries of the public employees in the pension systems.”  Those currently trekking along in the public sector path, I’m afraid, will end up taking those difficult additional steps.  Senator

SB2404 is not nearly enough for these three.

Biss would promote an instrument that asks – like 401k’s did in the 80’s – for the worker to assume economic risks for end-of-life retirement, while the state would avoid such risks in these new actuarial promises.  Cash Balance Plans, one of the Senator’s favorite saws, will provide increases in portfolios but to a calibrated level, beyond which the state reaps your extra earnings.  Losses, well, those losses are yours to suffer.  It’s your risk now.  These new non-pension footfalls are indeed difficult - as well as very different.

Back to Senator Bertino-Tarrant: to be fair, she has co-sponsored SB2404, a proposal supported by many public sector unions as a small, first step toward finding a constitutional resolution to the “Debt Crisis.” Senator Bertino-Tarrant continues, “This change would create an immediate savings of $4.7 billion and will save the state $18 billion or more over the next thirty years.” 

The Tribune, Civic Committee, Illinois Policy Institute, Rep. Nekritz, Senator Biss, and others would say this is not nearly enough.  They would shout, “Pension Crisis.” They would speciously connect the Debt Crisis to the annual costs of pension for the state retirement systems.  They would call out the need to share the sacrifice as a justification to fiscally injure those who were originally cheated, even as the annual costs for pensions has fallen or remained static these last two years. 

In fact, payments for pensions for public sector workers this year will be less than last year.  This is not to diminish nor disparage those needs – education, human, and medical services.  And other methods to meet those fiscal shortfalls exist – even if purposely overlooked.

But let’s not be swept along with the verbiage that so characterizes those who would eliminate pensions altogether, had they the chance.  Let’s stop addressing the need to take money from those owed even more with a truth: “We in Illinois face a debt crisis of nearly $100 billion, and in order to claw our way out of the fiscal hole, we in the General Assembly want to take even more away from those we shortchanged to begin with.” 

That’s the truth. 

If a Senator or a Representative or even a one-term Governor wants to explain “Pension Crisis,” just add that sentence, and I for one will applaud you for your honesty at least.   

For Senator Biss, that sentence would be amended with this: “and then you will be able to have a pension or what’s left of it, despite the constitutional promises I want to ignore.” 

That’s the truth too.

Alternatives to pension cutting? See Glen Brown's blog:
teacher/poet/musician glen brown: Illinois Politicians: Uphold the constitution and address the state’s debt crisis

Daily Herald/Reboot Invite: And a Response

An Invite from the Daily Herald/Reboot Illinois (and a response)

Slusher: noun.  One who promotes or provides an excessive amount of sentiment.  From “slush” to describe films of over-the-top emotion in 1950’s Hollywood.

Forum provides a chance for all views on pensions to grow.

By Jim Slusher (http://www.dailyherald.com/article/20130418/news/704189854/)

The Daily Herald has already stated unambiguously that we think pension reform needs to be instituted immediately and we tend to favor — in principle at least, if not in every detail — a compromise approach offered by state Rep. Elaine Nekritz and Sen. Daniel Biss.  For the Daily Herald to describe HB3411 as a compromise is the very definition of fallacious and distorted reporting.  Mr. Slusher would have people believe it is compromise when one side determines to eliminate another side’s benefits without a voice or a seat at the table -  benefits promised constitutionally.  Later on in the essay, you will read  pathetic passage defending their bias; the author will characterize the issues as very complicated.  Not really for the Daily Herald.  They don’t do complicated.

Might we, then, have an ulterior motive to promote a specific agenda in sponsoring along with Reboot Illinois an information program on pension reform proposals? It’s an understandable question. But the answer is an unequivocal no. Our only objective for the Pension Forum scheduled for next Wednesday night is to add depth and detail to the discussion over what to do about the state’s pension crisis.  That’s an interesting obfuscation, especially given the spokesperson for Reboot Illinois is a past member of the editorial staff if the Daily Herald.  And yet, spokespersons for the Reboot organization are trained, curried and graduated into the Reboot organization.  In fact, Mr. Lampinen (the moderator)  considered Doubek not only a friend, but also a mentor...a colleague...a strategic advisor to corporate leadership...feedback I have always valued"(Doubek leaves Daily Herald for Reboot Illinois ‘mission’ - Time Out Chicago).  

With that goal in mind, we and Reboot — a nonpartisan political reform website that coincidentally has also supported the Biss-Nekritz agenda — seek to create a program in which some of the leading ideas on the pension issue can get a thorough review before a suburban audience. If you believe that Reboot is a non-partisan political reform website, you are making a very strained and conscious effort to ignore Reboot’s founders’ contributions to the Koch brothers and other organizations that undermine workers unions across the United States.   Nearly $2 million in contributions to the Koch brothers in the past few years would make one wonder what Reboot’s “non-partisan” agenda is really all about.  Of course, once the Koch’s have purchased the Chicago Tribune, we might not expect any surprising revelations.  The continued attacks on public sectors workers will continue, exponentially.

Reboot’s Chief Operating Officer Madeleine Doubek secured commitments from state Reps. Nekritz, a Northbrook Democrat, and Tom Morrison, a Palatine Republican, and Illinois Education Association President Cinda Klickna to conduct a panel discussion that Doubek and Daily Herald Political Editor Kerry Lester will moderate.  By the way, Doubek is a past editor at the DH.  Let’s see – DH editor picked by Reboot founder who gives millions to Koch bros. to lead new non-Partisan political website?  Laughable.

It’s important to point out that the three speakers espouse positions that differ substantially from each other. Among other things, Nekritz’ proposal would end the compounding of annual 3 percent cost-of-living increases for retirees, make other adjustments to benefits and gradually shift responsibility for making pension payments from the state to local agencies.  Besides running head-on into constitutional conflict, Nekritz’s bill endorses a bill that makes those burglarized with the payment for Illinois’ debt burden.  Some of the component parts appear whimsical; even in the face of the pain it will cause thousands of pension recipients. Case in point: In a recent email correspondence from Representative Cassidy’s handlers, there is absolutely no reason for the amount of $25,000 to be the base for determining the new concept of a simple COLA.   In short, it is absolutely arbitrary.  Maybe it just sounded good at the moment?

Morrison’s — co-sponsored by Wheaton Republican Jeanne Ives — would move all new hires into a 401(k)-style savings program and freeze cost-of-living increases, at least for now.  These are two Tea Party right-wingers that would eliminate all payments to workers that pave roads, teach children, provide health care, care for the indigent, stop fires, provide emergency services, etc.  By simply dropping the pensions, we can eliminate all past debt, right?  Nope – we still owe the pensions $100 billion.  But the Tea Party loves simple without reflection, or legality, or consequence. 

The IEA supports proposals that maintain a traditional pension program, raise revenues by closing what they call corporate tax loopholes and require increased contributions from employees.  That would be SB2404, which is only the start of an attempt to find some balance between payment due for the theft of billions of dollars of guaranteed benefits from public workers and the need to provide services to current Illinois citizens.

 Each plan has strengths and weaknesses, and to be clear, these are not the only ideas worth discussing. But they are worth discussing, and in the process, the other ideas will surely emerge, as may others that no one has ever thought of before. Such is the purpose of our forum — that important ideas will be explained carefully and reviewed critically, that many perspectives will be aired openly and that all who participate will leave with information and ideas they did not have when they began.  How obsequious, you’ve been invited to a gathering to share in the very opposite of what we promote – “we tend to favor…Nekritz approach…” Maybe additional ideas from ALEC, one of the Reboot’s chief friends, will be offered?

We knew from the outset that public pensions are an important topic, but we did not expect the complicated politics of the issue to attract as much interest as they have. As a result, we’ve had to move to a larger venue and still cap attendance and turn away some people. That process naturally stirs fears some people may be shut out so that their point of view will not be presented. To that concern, I can only say: We are an information company. We have and express opinions sometimes, but our No. 1 objective, our No. 1 interest, is to provide information, particularly information that will help our democracy work better.  Warning: The Daily Herald’s vision of “our” will not necessarily be the same as yours, public sector worker. 

So, if for whatever reason you cannot make next week’s forum, take heart. We’ll be live streaming the program and finding other ways to involve people in the discussion who may not be attending in person. Who knows? Our own views about the legislative approaches under discussion may change. We know for certain that they’ll grow. Whether you are a teacher worried about your future, a citizen worried about your taxes or a school board member worried about your budget, whether you attend in person, watch at dailyherald.com or just read about it all later, we hope yours will, too.  You betcha.  Those good people at the Daily Herald and the pipeline they work with called Reboot Illinois could possibly change their minds and agree that public sector workers were ripped off, owed money, agreed to make all their payments while the state did not, maintain a part of a middle class that provides a huge econocmic boost to the economy in Illinois... and there are many other means to correct a systemic state failure to secure revenue.  BUT I DOUBT IT.

HB3411: Making Sausage with Chef Nekritz

I'm thinkin' 'bout being a politician, Mom.

Making Sausage…(Civic Committee Style with Chef Nekritz)

Two bills siting before Illinois legislators dramatically illustrate the polarized direction that “pension reform” could take. 

The first bill, HB3411, developed by Representative Elaine Nekritz and then-Representative Daniel Biss could likely be called for a vote in the House in the next two days.  Representative Tom Cross, who often promised he would never hurt current retirees, signed on eagerly as a co-sponsor. 

HB3411 is the bill heralded by the Civic Committee of the Commercial Club of Chicago as the preeminent method of dealing with the enormous debt owed to public sector workers after many decades of diverting the promised matching funds for other political purposes.  The Civic Federation, a business club, also endorses the bill.  The Chicago Tribune's editorial board, as evidenced in copy,  loves HB3411.

Retirees won't be affected.

It is, therefore, no surprise that HB3411 is designed to address the state’s enormous, resultant debt by further ignoring promises made to current retirees, punishing active workers with increases in contributions and loss of benefits earned, and jeopardizing the economic futures of would-be workers by creating new tiers and ultimately far less benefits. 

When you ask those many Representatives who signed on with Nekritz and Biss about the possible harm in the bill, you will not hear the words collaboration or pension protection clause or promise or benefit – except to say that they believe you have none of these given the dire situation in Illinois.  

They would also tell you that you are responsible for getting too much, living too long, making too much, not paying in enough, etc. 

SB2404 is another very different kind of bill sitting in a Senate Committee, and the bill represents a very opposite approach to finding some resolution to the enormous debt the state faces after so many years of delinquency in payments to public workers.  SB2404 was sponsored by Senator Linda Holmes and Senator Pamela Althoff.  The bill is also co-sponsored by another twenty-two Senators. 

The Civic Committee and the Civic Federation do not appreciate SB2404.  The Chicago Tribune considers it weak and insufficient in generating the kind of funding that would quickly replace the billions diverted by earlier politicians.  The Tribune and the business groups want that money back quickly, and they want it to come from the people who were owed the money to begin with.

It is, therefore, no surprise that SB2404 is designed to take a beginning, significant step toward fixing the debt the state owes the public workers.  SB2404 would provide a funding guarantee and work toward a dedicated revenue stream to pay pensions (as in IMRF).  It would require a two - three percent increase in contributions by public workers.  It is a start, and the sponsors see it that way. 

When you ask those many Senators who signed on with Senators Holmes and Althoff about the bill, you will hear the words you’d never hear from Rep. Nekrtiz and others talking about HB3411.  In fact, one Senator said, “While it is just one solution out of many, it (SB2404) is without a doubt constitutional.”  Another Senator remarked, “The measure of any man or politician is not the promises he keeps during good times, but during difficult times.  We need to keep our promises.”  Others like Senator Althoff attribute the bill’s strength to its “compromise and collaboration.”

Representative Elaine Nekritz

HB3411 is designed and groomed to trump legality, ignore contractual promises, blame those who were taken advantage of, directly challenge a constitutional clause, and shirk political responsibility and leadership.   Call your legislator now to vote “no” on HB3411.  And let’s remember those who brought HB3411 to life: Nekritz, Cross, Biss, Harris, Feigenholtz, Senger, Zalewski, Sente, Gabel, Davis, Harris, Arroyo, Hernandez, Burke, Mell, McSeeney, Schmitz, Sullivan, Sandack, Pihos, Hatcher, Sosnowski, Morrison, Wheeler, Osmond, Bellock,Durkin, Kosel, Tracy, Roth, Leitch, Sacia, and Dunkin. 

Also, make a phone call and remind Senate Committee members that SB2404 deserves life and needs to be released from committee to the floor: Harmon, Silverstein, Clayborne, J. Cullerton, Hunter, Lightford, Link, Munoz, Steans, Trotter, Murphy, Luechtenfeld, Radogno, Righter, Syverson.

Oh, by the way -

The Illinois Policy Institute does not endorse either bill, but backs another bizarre idea to do away with pensions altogether, but that’s another story first told by Ayn Rand.  

Reboot Illinois? Warning: A New Virus

Reboot Illinois?   (Warning: A New Virus)

Groups like the Illinois Policy Institute, the Civic Federation, the Civic Committee for the Commercial Club of Chicago, and other corporatist assemblages have been loud and vocal supporters in the incessant battle to strip Illinois’ public unions of work-place guaranteed benefits like pensions. 

Some use striking images like an Abe Lincoln with empty pockets to emphasize their fearful messages.   Others provide mannequin-like beauties to answer questions with toothy smiles on evening programs like Chicago Tonight.  Others use strong-arm tactics like listing the names of legislators to excoriate in double-page ads of supportive papers like the Chicago Tribune.  And some quietly tiptoe in the back door.

November last year witnessed the launch of a brand new for-profit media concern called Reboot Illinois.  Reboot Illinois is the brainchild of Anne Griffin, a woman hedge fund manager in a world comprised of men.  Crain’s described Griffin’s pride in her “new baby,” but also her wish to remain just a “quiet investor.” 

Crain’s also interviewed the first editor and political writer selected by Griffin to spearhead the project, Madeline Doubek, a former Daily Herald editor.  “ We intend to be the home and hub for people to speak up and speak out and take back ownership of our government in Illinois,” she explained to Crain’s (http://www.chicagobusiness.com/article/20121119/BLOGS03/121119797/anne-griffin-launches-reboot-illinois-today).  Griffin specified through another spokesperson that Ms. Griffin had no intentions of operating the day-to-day operations, but will instead remain “a silent investor.”  What Griffin envisioned is an “online media site dedicated to citizen journalism.”   Sounds non-partisan enough, but….

A quick look at the media website under “About Us” begins to sound a tad shrill in its concerns and not so clear about its ideology – except for taking back government for the citizens.  “We are paying more and getting less. Illinois raised taxes by 67% in 2011, making it one of the most taxed states in America. Yet, we have nothing to show for it. Pension costs are crowding out essential services for the state, especially for the neediest. And hardworking taxpayers simply can’t afford to pay more” (http://rebootillinois.com/about ).

I think I hear the teakettle steaming?

Welcome to our getaway cottage

And who actually is Anne Griffin?

Well, Ms. Griffin, who prefers to work in the background or shadows of her new campaign is something of a financial marketing wizard, the head of “Aragon Global management LLC, a multi-million dollar hedge fund that invests in communications, financial and consumer stocks…” (Crain’s).  According to Open Secrets, she and her husband Kenneth, give nearly as much money to the National Republican Committee and local Republicans as the Koch brothers.  In 2004, they spent nearly a quarter of million dollars in donations to the Grand Old Party (http://www.opensecrets.org/bigpicture/topindivs.php). 

In fact, her husband, Kenneth is himself a billionaire hedge fund manager, founder and chief executive of Citadel LLC.  But they don’t just trail David and Charles Koch; they also provide them both with money to fund A.L.E.C. and the causes the Koch brothers support.  They’ve given the Koch brothers over $1.5 million (http://articles.chicagotribune.com/2012-06-02/business/ct-biz-0603-confidential-griffin-20120602_1_julian-robertson-digital-media-aragon-global-management ).  You might imagine it’s not going to be used to support pensions – either in the private or public sector.  Neither would I.

Welcome to our forum.

On April 24^th, Reboot Illinois is holding a “serious” discussion on pensions with the for-profit Daily Herald at the Wojcik Center at Harper's College from 7 p.m. to 9 p.m.  According to the organizers, response has been overwhelming, and the event had to be moved to Harpers College in Palatine, IL.  There will be a rally outside the Wojcik Center from 5 p.m. to 6:45 p.m. by Northern Illinois Jobs with Justice.  The Daily Herald editor John Lampinen is “thrilled” to be working as partners with Reboot in developing this forum.  I expect Lampinen will be the host and leader of questions.  Certainly, it will not be Anne Griffin, who just works in the background.

But one does wonder what kind of questions might come from a group which spends so much time complaining about tax issues and so, so, so much money on the Koch brothers. 

Rep. Elaine Nekritz who promotes the Civic Committee's desire to cut away at most benefits without regard for constitutional protection in her bills) will be there. Tea Party Representative Tom Morrison (who believes there just shouldn't be such a thing as pensions at all) will be there. I want to wish IEA President Cinda Klickna my best wishes as she wanders into this orchestrated forum.  As Reboot says, “But our questions aren't the important ones. Yours are. Our role is to provide the setting and then get out of the way. We look to you to lead the discussion”   

(http://rebootillinois.com/Contents/Item/Display/3110).

I imagine providing the setting means pitchforks and torches?