Closer to home in local politics, the topic du jour – the desperate rush to reform pension – has received much scrutiny and criticism.  While it’s easy to point fingers at conservatives (the term “tea party,” and the more vulgar “tea baggers,” has been bandied about regarding the North Miami Beach City Council, to use just one example), a closer inspection of the pension situation yielded the surprising results that this issue not only crosses, but blurs party lines altogether.  A Salon.com article, Exposed: Enron billionaire’s diabolical plot to loot worker pensions, reveals that Democrats and Republicans both are very much in bed with each other when it comes to protecting Big Wall Street investors.  Another player in game is the allegedly non-partisan Pew organization by way of its various subsidiary trusts.  Salon, a largely left-leaning publication, suggested in this article that Pew’s interests were more toward right wing ideology, yet Salon also referenced a Wall Street Journal article from April 1, 2005, Too Good to be True, in which the usually conservative WSJ accused Pew of doing “all it can to encourage the castor-oil liberalism that it so loves.”

Either way, the national trend toward pension reform has gained momentum, and local governments are quick to jump on the bandwagon by convincing voters that the only way to solve their fiscal problems is to slash the pension benefits of government employees from top to bottom.  On the surface, it’s easy to buy into this idea when the mantra of “unfunded pension liabilities” is continuously repeated until it’s believed that pension reform is the sole solution to “unsustainable” budget problems.  But as the Salon article pointed out, something far more insidious just may be going on right under our noses.

“Based on indisputable evidence, it proved that the country’s move away from guaranteed pension income – and states’ willingness to raid worker pension plans to finance massive corporate subsidies – will have disastrous consequences.

What was surprising was the fact that at the same time one branch of Pew was rightly sounding this moderate non-ideological alarm to shore up retirement security, and Pew’s Economic Development Tax Incentives Project was warning of states’ wasteful tax subsidies, a more political branch of the organization was working in tandem with controversial Enron billionaire John Arnold to begin championing an ideologically driven plan to make the retirement problem far worse.”

Even more revealing is the question asked by the article, “Should an Enron Executive Be Dictating Public Pension Policy?”  The column explains:

“In the lead-up to his anti-pension partnership with Pew, Arnold’s most relevant connection to pensions and retirement security came from working at Enron – a company whose collapse destroyed its own workers’ pensions and helped to damage the financial stability of public pension funds across America. Indeed, as the New York Times reported, “The rapid decline of the Enron Corporation devastated its employees’ retirement plan.” Meanwhile, in a separate story, the newspaper noted that “across the United States, pension funds for union members, teachers, government employees and other workers have lost more than $1.5 billion because of the sharp decline in their Enron holdings.”

I don’t know about you, but I smell a conspiracy.

The article also goes on to state:

“Rather than acknowledge that truth, Pew and Arnold have successfully manufactured the perception of crisis – which has prompted demands for dramatic action. Pew and Arnold have consequently helped shape those general demands into specific efforts to cut guaranteed retirement income – all while downplaying (or altogether omitting) any discussion of the possibility of raising revenue through, for instance, ending taxpayer-funded corporate subsidies and so-called tax expenditures. This deceptive message persists, even though these annual subsidies are typically far larger than the annual pension shortfalls. ”

While the municipalities in Miami-Dade County can hardly be compared to Detroit, where “the very same political leaders pleading poverty to demand cuts to municipal pensions were simultaneously promising to spend more than a quarter-billion taxpayer dollars on a professional hockey arena,” this is “the same misleading mythology that is now driving public policy in states across America.”

Those elected officials who honestly believe that current pensions are in dire need of drastic and immediate reform often seem to forget that there are other ways to cut spending and balance a budget without completely destroying the public workforce.  They also don’t seem to have a problem funding their pet projects or doling out much needed money to questionable “non-profits” in order to be able to beef up their re-election campaign material.  If they can convince the voting public that they saved the day by “shared sacrifice,” despite the fact that they did not take their share of the sacrifice, their re-election is all but guaranteed.  In any given municipality, which typically has a voter turnout of about 10% for a local election, most residents don’t think about their government as long as their water is running, their garbage is picked up and the police or fire department show up when called.  Elected officials who claim to represent “the people” are in essence referring to the very vocal STPs (Same Ten People) who show up at council or commission meetings twice a month.  If those STPs have conflicting opinions, you’ll get a split vote on the dais and controversy ensues.  But rarely (and sadly) do any elected officials even once consider the needs of their municipality’s own employees, who end up being the only ones “sharing” in the sacrifice.

More heartbreaking to me is what has been suggested as a sort of reverse class envy situation.  Today’s public servants don’t understand why they have lost the respect of elected officials.  Perhaps it’s because many politicians have never worked in the public sector and have no idea what it’s like to be a government employee.   Most private sector jobs pay much more than government work, but those jobs don’t usually include defined benefit pension plans.  Because of the current financial disaster, private sector employees have now found their own private retirement funds diminished or even wiped out.  Politicians who are now faced with balancing municipal budgets, under the guise of pension reform it’s easy for them to go after what many believe are way too generous contracts given to public employees.  Class envy is never a becoming character trait.  When negotiating the the salaries and pensions of public employees, politicians should keep in mind that are dealing with human lives and not statistics.  They also need to remember that they’re dealing with the very people who provide daily essential services to their constituents, and to themselves.

After I wrote my column, A Deal’s a Deal, I received an email from a general employee of the City of North Miami Beach, whose words could probably sum up the feeling of every government worker these days.  I will close with his words, which I am hoping will make an impression on politicians who need to be reminded of their own humanity:

“Thanks for finally pointing out that the financial meltdown was the cause of the pension problem in the first place. By its nature a pension is designed to eventually be self-sustaining, even profitable for both the members and the organization. The benefits are based on financial assumptions, including the rate of return on investment.

The way I see it, we all made a deal when we came to work here. My deal was, after two years, the city would take 7 percent of my pay and put it into a pension fund. In return, I would be able to retire at age X and receive X percentage of my salary in the form of a monthly pension check. This was not an optional deal, by the way. I did not have a choice to keep the 7 percent and save or invest it in the manner of my choosing. And now, even though the deal clearly stated that I could vote to change or not change the deal, the council changed the deal anyway.

I didn’t post this as a comment because it’s clear to me that the rest of us are and will always be deemed inconsequential in any conversation that includes [police] officers, firefighters and teachers. But there are a lot of the rest of us, mostly behind the scenes and taken for granted, who’ve been screwed out of the deal they signed up for, and, for the last several years, universally and publicly maligned as worthless, lazy and greedy. I am sure I am not alone in finding that extremely hurtful. While I can choose to not read the news and the public comments, I do have to answer my phone at work and listen to angry people who initiate the conversation with “I’m a taxpayer and I pay your salary,” with all of the above implications. That, to me, is much more painful than the idea that when I retire I’ll get less money. I don’t even think about how much money I’ll get when I retire, as it’s a long time from now. But I have to answer that phone, and endure that abuse, every day.

Please don’t think I’m whining. I am not. I’m okay with the changes to my pension. I never expected to work for 20 years and retire a millionaire. Likewise I don’t expect to retire at any age and keep getting paid the same amount, for not working, until I die. I don’t want to travel around the world or go get another job and start another pension. In other words, I’m not hell-bent on getting rich off this job. I just want to go to work, do my job, do something meaningful and useful, and get paid. I think I am very well compensated for what I do. I also view my pension, whatever it ends up being, as more than I would have ever received working in the private sector. I had a 401k, and I think I’ve already lost all of what my former employer contributed, and probably much of what I contributed. That’s life. It’s a bitch, and then you die.”

Stephanie Kienzle
“Spreading the Wealth”