Thursday, July 7, 2011

The Pension Reform Plans of Those Who Hate Pension Reform

Now that his joke of a budget has been signed into law, and now that his pay has been restored by controller John Chiang, Senate President Darrell Steinberg has moved on to another critical policy issue facing California's government: public pension reform. In an interview with the Sacramento Bee yesterday, Steinberg offered this cryptic description of his thoughts on government retiree benefits: "What we put forward has to be strong, it has to be real, but it doesn't have to be what those who have an ideological agenda would demand as part of a negotiated solution." We're not fluent in union-shill-speak, but we would translate that as, "We're going to put something forward, but it won't include anything that the unions who employ me think is too excessive." As far as what a proposal from the Legislature's Democrats might include, Steinberg pointed to the half-finished reform ideas that Jerry Brown offered back in the spring: eliminating "air time" purchases, pension holidays, and retroactive pension increases, and retracting benefits for those convicted of felonies while working for the government. We wrote about Brown's proposal when it was first released; in general, we agreed with Steven Greenhut that, while these are all good ideas, curbing a handful of the system's more obvious abuses without deeper structural reforms isn't going to fix half a trillion dollars in unfunded liabilities. That's going to require more meaningful changes, like pension caps and an end to defined-benefit retirement plans, to say nothing of paring down the government workforce. And Steinberg doesn't seem excited about going down those roads.

In other words, given the tight linkage between organized labor and the majority party in Sacramento, don't expect anything resembling a serious approach to public pension reform. We're guessing that the Legislature won't do anything until the problem escalates from a worry into a crisis. Unfortunately, if you believe the New York Times, that may happen sooner than Steinberg thinks.

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