WALKER: Don't worry, I'm not planning to change state pensions, because that would be against current law | Wis.Community

WALKER: Don't worry, I'm not planning to change state pensions, because that would be against current law

[img_assist|nid=58789|title=|desc=|link=none|align=left|width=140|height=156]Wisconsin state government is sending out emails to public employees reassuring them that Gov. Scott Walker isn't planning to scale back, transform or gut the Wisconsin Retirement System (WRS), widely regarded as the best funded and best run pension program in the nation.

Why was it necessary for the Walker administration to do this? Because public employees for good reason do not trust Walker. And because Walker sees this latest uprising as another threat to his governorship.

Walker sent an email to his cabinet secretaries, some of whom in turn this week wrote to their staffs in an attempt to damp down growing concerns and rumors regarding the state's plans for the WRS. In his original email, which some of the cabinet secretaries simply repeated verbatim, Walker said he's just taking a close look at the pension system to "support" it with new research.

Never mind that this kind of research already exists, outside the political realm of partisan policymakers. The move by Walker is very troubling, because state lawmakers have never before presumed to interfere in the way the retirement system's professional actuaries run the show.

Walker also wrote that employees should not be worried, because state law does not allow elected officials to modify already-earned benefits. Which, of course, falls on deaf ears among public employees local and state who remember with crystal clarity how Walker overturned decades-old state law to gut their labor unions. [It's not so much state law as court rulings, by the way, but in any event that's irrelevant; read on to see way.]

Walker must think public employees have short memories. Buried in his original "budget-repair" legislation last year was a provision to study the possibility of establishing a defined contribution system as an alternative to the long-standing and very successful public pension system. Walker made a similar proposal for Milwaukee County employees when he was county executive.

Even if Walker could be believed when he says he won't touch existing retirement benefits (hell, he's already touched the benefits of existing workers by cutting the state's contribution), he has said nothing about the possibility he might split the system, offering fewer benefits for new employees or a defined contribution plan instead of a pension plan, or both. That's a divide and conquer strategy.

Some Republican legislators meanwhile have suggested it might be a good thing to separate the University of Wisconsin's employees from the WRS. See, they don't want to destroy the fund in one grand move; rather, they just want to shrink it to the size where they can drown it in a bathtub.

Why did Walker find it necessary to send out his problematic reassurance? Because Republicans last year eventually did pass a budget measure requiring a detailed study of the WRS, due June 30. That measure was widely seen as a precursor to a Republican attempt -- replicated in other states -- to move away from the current defined benefit system toward a defined contribution system.

For those unfamiliar with the terminology, that kind of move would begin an eventually total change of WRS from a pension program to the equivalent of a 401(k). Instead of promising employees a certain level of retirement benefit based on years of service, the benefit would be totally defined by how much of your own money you'd put into the program and how well the program performed.

Of course, anyone who has a 401(k) knows that it's a huge crap shoot. Indeed, many people have seen their 401(k) retirement investments devastated by the last several years of economic meltdown. So much for retirement income security.

And public employees have every reason to be suspicious of Walker's motives and intent. For one thing, he tends to lie a lot, as even Politifact has recognized. For another, Republicans are openly fond of private investments as an alternative to public retirement systems, ignoring those occasional Wall Street financial meltdowns that benefit the insiders at the expense of most citizens.

Indeed, George W. Bush and other Republicans made concerted efforts to move Social Security investments into risky Wall Street instruments in order to "save" the program. Not only would that have been a profitable boon to private fund managers, it would remove most of the existing certainty in the government programs, certainty that helped keep our economy stable for many decades. And Rep. Paul Ryan would like to rip a big hole in the hull of Medicare by doing the very same thing to it -- redefining it for future users in a way that will harm the entire program until it withers.

WRS, by the way, covers most public employees at all levels in Wisconsin, except for Milwaukee city and county, which have their own pension systems. That's hundreds of thousands of local government employees in Wisconsin, including public school teachers, whose pensions Walker and company would like to further devolve.

Some people including many Republican politicians point to problems with public pensions outside Wisconsin (most of them the result of other states' politicians failing to fully fund their pension programs despite promising to do so). These observers also regard pensions as unfairly generous. But the fact is that a pension contribution amounts to a delayed, deferred salary. Before Walker, the State of Wisconsin often negotiated lower salaries with represented employees in exchange for larger state contributions to pensions, a win-win result for both government and its employees. 

Walker, of course, is the politician who ignored that truth and who made state employees -- already making less in total compensation than their private-sector counterparts -- pay even more of their earned income into their pensions, reducing the state's promised contribution. That was just another pay cut on top of earlier ones, politically disguised as a "fairness" issue.

Walker is also the governor who tried appointing businessman John Peterson to the board overseeing WRS. John Peterson withdrew from consideration after criticism over his earlier stint on the board. In 2000, Petersen voted to have the board invest $80 million in a business that had ties to a company in which he owned stock.

Walker is only the latest Republican governor to go after the pension fund. When Tommy Thompson was governor, he mounted a direct raid on the pension system's funds in order to help pay for a state government subsidy to Chrysler Corp., which was threatening to pull its Kenosha automaking operations. Courts ruled that the pension raid was illegal and the state had to replenish the fund. Chrysler left Kenosha anyway, even though it got to keep the pension monies that taxpayers had to cover to make public retirees whole again.

Published

February 25, 2012 - 1:57pm

Author

randomness