The Republican war on the poor is in full swing and their assault on the working class is heating up. Their goal is to cut government spending at all levels for social services, destroy unions, and privatize everything they think their corporate keepers can make a big buck on, things like Medicare and Medicaid.
If it doesn’t make you want to throw a bagger overboard with the tea, you’re either stinking rich or you just don’t understand what’s in your own best interest.
One of the chief justifications for all the havoc the GOP plans to wreak is the federal deficit, the Trojan Horse of the political right. And here in Maine, the right-wing extremist justification for trying to balance the state budget on the backs of teachers and public employees is the looming state pension fund “crisis.”
You may have read about it in these very pages in the Maine Center for Public Interest Reporting series, “Pensions: The Next Budget Crisis.” In the-sky-is-falling prose, the center described the unfunded actuarial liability of the state pension fund as a “time bomb” set to go off in 2028.
Kaboom! Your pension, your retirement, your golden years, destroyed.
But never fear. The Republicans-to-the-rescue will defuse that time bomb by cutting state pensions, raising the retirement age, and forcing public employees to contribute more to their pensions. Neat, huh?
Well, folks, that 2028 D-Day is completely arbitrary and capricious. The date was set after state employees successfully sought a constitutional amendment in 1995 to mandate that the state fully fund the pension system over three decades, fearing the money wouldn’t be there when they retired. They did not, of course, reckon that a newly embolden Republican majority would one day use the deadline as an excuse to raid their pensions and destroy their unions.
I read the five-part MCPIR series with increasing agitation and astonishment. When, I kept wondering, are they going to report that some knowledgeable people don’t think there is a pension crisis at all?
Finally, way down in the weeds of the fourth installment, David Wakelin was quoted as saying, “These liabilities were built up over 40 or 50 years and there’s no critical reason they need to be eliminated over the next 15 years.”
Most of the people quoted in the pension series were politicians or policy wonks. David Wakelin is a pension attorney who served on the Retirement System Board of Trustees from 1988 to 2008. For my money, the MCPIR pension series should have quoted Wakelin much earlier and much more forcefully, but then that would have destroyed the urgency of their reporting.
While State Treasurer Bruce Poliquin, a rich Republican also-ran for governor, barnstorms the state warning citizens about the state pension fund “monster” out there, Wakelin, one of the few people who knows what he’s talking about when it comes to the pension fund, has said, “That’s simply baloney, and they are scaring retirees.”
In his March 4 testimony before the Joint Standing Committee on Appropriation and Financial Affairs, Wakelin explained the pension fund baloney:
“I respectfully disagree with statements made to this committee by the governor and Treasurer Poliquin in two important respects: (1) Maine does not have a pension funding ‘crisis,’ and (2) it is not necessary to substantially reduce participant and retiree benefits to address this problem. The state has a problem that has existed for 40 to 50 years, which has been responsibly addressed by Republican, independent and Democratic governors over the last 20 years. In 1987, the system was only 26 percent funded (assets of approximately $1.0 billion and liabilities over $4.0 billion). Now, the system is over 70 percent funded. The unfunded actuarial liability today is far less than it was in 1987 in inflation-adjusted dollars.”
Wakelin concluded that “a simple constitutional amendment can correct the problem.”
A constitutional amendment created the artificial deadline and a new constitutional amendment can extended it or put it on a 20-year rolling average payment schedule.
Oh, my gosh! We’ll never get it paid off! Our grandchildren will be paying our bills!
Well, look, Chicken Little, we paid our grandparents’ World War II bills. The United States never retires its debt. General Motors never retires its debt. And there’s no reason Maine needs to do so in a way that threatens social services and public employees.
It’s a simple fix. Don’t allow Gov. Paul LePage and his cronies to use a phony state pension fund crisis as a weapon in their war on the poor and working class.