October 29, 2011
Who Is Stealing from Whom?
Not to edge into Andrew's territory in the Great Pension Debate, but a point that a town resident — with whom I often agree on local matters — made when the Tiverton Town Council voted to support "meaningful state-wide pension reform" raises a curious distinction of when government action is "theft":
Audience members Roger Bennis and Bob Martin both spoke against the resolution, on the grounds that the pension benefits formed the basis for a contract between the government employer and the employee.Mr. Bennis said that pension benefits "had been bought and paid for over the working lifetime of the employee," and the reform that takes benefits away is "theft of previously earned pension benefits."
The article doesn't say whether Mr. Bennis made a distinction between the current reform, which attempts not to decrease benefits that have already been earned, and a more realistic reform that might actually address the pension problem, but in either case, I can't help but wonder: I've worked my entire working lifetime, thus far, to buy a house and build a financial foundation on which to raise three children. If property, sales, and income taxation increases to confiscatory levels (rather, to even more confiscatory levels) in order to support public-sector pensions, how is that not at least the very same degree of theft that Bennis decries?
Oh, sure, the government is empowered to tax, provided due process is respected, but it's also able to adjust legislatively determined benefit levels, especially when there's a pressing public purpose. In cases of bankruptcy, the judicial branch of government has even more leeway.
Mr. Bennis cannot have it both ways. That is, it cannot be theft to remove benefits from public employees, but not theft to increase taxes solely to cover those benefits through wealth transfer.
Simple hypocrisy test:
If revenues were greater than expected, and the state offered bonuses to all these firemen, police, and teachers out of appreciation for their public service (as happened last year in evil, anti-union Virginia), do you really think they'd refuse the money on the ground that it would be "theft" from the taxpayers? Snowball's chance in hell.
I'd have more respect for these people if they simply admitted it's about the money instead of principles. I don't have any problem with financial advocacy, but the moral highground charade is laughable.
Posted by: Dan at October 29, 2011 10:42 AMWhy doesn't Raimondo get immediately suspended? She is a Turk, and doesn't know what she is doing. She has committed more than one ethics violation. She is a disgrace to the human race.-A real Neanderthal.
Posted by: monalisa at October 29, 2011 3:28 PMI was recruited by the Warwick Fire Dept in the seventies with a sales pitch of a back loaded contract that would pay out the back end in the form of a pension. I would have to work the next 25 years for wages that were significantly lower than average taxpayer wages. The pension portion of my wages would be considered deferred compensation and be fully taxable. This issue of contributions to the pension system is completely false and politically motivated. Asking workers to contribute more is just getting them to have lower wages . Oh yeah—with a promise to pay them their full compensation.
We have to decide who we are as a nation. As a people. You may think that it is easy to break these contracts when times are tough. Easy to make excuses.
" She is a Turk, and doesn't know what she is doing."
Nice racism. Care to identify yourself and the public union to which you (or your spouse) belong?
"She has committed more than one ethics violation."
Please list them.
David S,
I could sign a contract with a financial "manager" that says I'm going to contribute $10 a month for 25 years, and at the end of those 25 years, he's going to return me $1,000,000. Whether you want to call this "deferred compensation" or not doesn't really matter.
In 25 years, when the manager can't make good on the $1,000,000 based on the contrbutions, disallowing him from taking money that is not his, to fulfill the ill-thought out deal, is not what "breaks the contract".
Change the numbers, and you have exactly the state the RI pension system is in. The contributions were never enough to provide the benefits promised, and you can't contract reality out of existence.
I think an important question is what were pensions originally designed to do. Were they really ever meant to provide a rich and full income for decades of retirement or were they meant to be a supplement in old age? The term "old age" is very different now then it was 50, 60+ years ago and people are living much longer lives. I also would like to see a detailing of the other retirement benefits are included in these packages. Eliminating a COLA can be made to sound terrible, but if you've also got free healthcare for life you're still doing pretty well...
Posted by: Bucket Chick at October 31, 2011 8:28 PM