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Analysis: Quinn’s call for special session on pensions might not be so special

FILE - In this April 17 2013 file phoIllinois Gov. PQuinn speaks reporters his office Illinois State Capitol Springfield. On

FILE - In this April 17, 2013 file photo, Illinois Gov. Pat Quinn speaks to reporters in his office at the Illinois State Capitol in Springfield. On Thursday, June 6, 2013, Quinn called a special session on June 19 for lawmakers to focus on finding a solution to the nearly $100 billion pension crisis. He made the announcement the same day Moody's Investors Service lowered Illinois' credit rating. (AP Photo/Seth Perlman, File)

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Updated: July 8, 2013 6:35AM

SPRINGFIELD — Gov. Pat Quinn ordered state lawmakers back to Springfield later this month after Illinois was hit Thursday with its second credit-rating downgrade of the week following the Legislature’s failure to whittle down the state’s pension deficit.

But the odds appear stacked mightily against Quinn’s call for a special legislative session healing what Moody’s Investors Service Inc. dubbed the Legislature’s “political paralysis.”

First, he doesn’t appear any closer to a deal with House Speaker Michael Madigan (D-Chicago) and Senate President John Cullerton (D-Chicago) than he was when lawmakers adjourned for the summer last Friday.

And, compared to last week, a higher voting threshold is necessary in the House and Senate to get anything to the governor’s desk, meaning a much harder legislative lift to pass anything.

On top of those points, history is no friend of the governor when it comes to special sessions. This marks the second time in less than a year Quinn has ordered a special session in a bid to break the impasse on pension reform. The last one accomplished nothing.

“I would say he tried that last year, and it didn’t work. I’d suggest he seriously, seriously consider the drawing board before he invites us back to Springfield,” said House Majority Leader Barbara Flynn Currie (D-Chicago). “It’s a risky play for him unless he’s pretty sure he’s got a solid agreement and therefore some solid votes.”

Similarly pessimistic, Moody’s ratings downgrade came with a somber warning not to expect much change.

Moody’s cut the rating on $27 billion of outstanding general obligation bonds one notch to A3 from A2, which is still investment grade.

In addition, Moody’s lowered by a notch its ratings on about $5 billion in related debt the state has issued.

Moody’s laid the decision on the General Assembly, which ended its session May 31 with no action on pension liabilities approaching $100 billion.

“Our rating now assumes the government will not take action to reduce the state’s pension liabilities any time soon,” Moody’s said. “The legislature’s political paralysis to date shows not only the magnitude of Illinois’ unfunded benefit liabilities, but also the legal and political hurdles to legislation that would make pensions more manageable long term.

“Without significant reforms,” the firm continued, “substantial growth in both unfunded liabilities and in annual funding burden [is] likely in coming years.”

Moody’s noted that income-tax increases are due to expire in 2015, potentially worsening the state’s finances.

On Monday, Fitch Ratings lowered the grade it assigns to Illinois debt by one level, to “A-minus.”

Lower debt ratings force the state to pay higher interest rates when it seeks new credit.

“Will two downgrades in one week be enough to convince the General Assembly that our pension crisis can’t be ignored anymore?” Quinn asked in a statement following the Moody’s move.

“Time and time again over the past two years, I have proposed, asked and pushed members of the General Assembly to send me a comprehensive pension reform bill,” he said. “Time and time again, failure to act by deadlines has resulted in the bond rating agencies lowering our credit rating, which hurts our economy, wastes taxpayer money and shortchanges the education of our children.”

Quinn’s call for a special legislative session for June 19 comes after the governor tried convening a meeting with Madigan and Cullerton to try reconciling their differences on competing pension bills that passed each legislative chamber.

Madigan was a no-show at that Tuesday meeting, with an aide telling the Chicago Sun-Times 11 times the powerful speaker “was not available” when pressed on his whereabouts and reasoning for missing the meeting after the Fitch downgrade.

Quinn told reporters he tried to get the speaker to call in to the meeting but learned Madigan doesn’t carry a cell phone.

On Thursday, Quinn tried again without success to reach Madigan by phone.

“The governor called him again [Thursday], called his wife. He got in touch with his chief of staff. But the governor still hasn’t spoken to the speaker,” Quinn spokeswoman Brooke Anderson told the Chicago Sun-Times.

Last August, Quinn also ordered legislators back to Springfield for a special session, but that only resulted in both legislative chambers briefly gaveling in and gaveling out with no action taken.

This order carries the added risk of highlighting Quinn’s ineffectiveness in working the levers of power at the Statehouse with the 2014 campaign cycle beginning and his own re-election bid facing possible challenges from Democratic Attorney General Lisa Madigan and former White House Chief of Staff William Daley.

The odds are stacked against success on June 19 because under the Illinois Constitution, both chambers will have to approve pension legislation by a three-fifths vote in each chamber to get anything to the governor’s desk in order for it to take effect immediately. Otherwise, anything passed with a simple majority vote in chamber would have to wait until next June 1 to take effect.

The more restrictive legislation Madigan favored passed the House in early May on 62-51 roll call, nine votes shy of super majority status. It was killed in the Senate. The Cullerton-backed, union-approved legislation the Senate passed a week later passed the Senate 40-19, which met the three-fifths threshold, but Madigan has kept that bill bottled up in the House.

Anderson said the governor’s office received signs this week from the offices of both Democratic legislative leaders that they are willing to continue working toward a single pension plan.

“The office of the speaker and Senate president have indicated to the governor’s office they’re willing to pursue common ground,” she said. “I think that’s important.”

A Madigan aide did not respond Thursday to Quinn’s latest call for a special session but in an interview earlier this week mocked the idea of the governor bringing lawmakers back to Springfield without first having a pension deal in hand.

In fact, in that earlier interview, Madigan spokesman Steve Brown likened Quinn to scandal-tainted, imprisoned ex-Gov. Rod Blagojevich, who ordered close to three dozen special legislative sessions during his time in office in one of the more extreme examples of political futility Illinois has seen in recent memory.

“Blagojevich proved the value of dragging people back to Springfield when there’s no agreement,” Brown said. “The governor tries to avoid comparisons to Blagojevich, I thought.”

A Cullerton aide said Thursday the downgrades demonstrate the urgency to deal with pension reform and that her boss is willing to meet with the governor and legislative leaders, rank-and-file lawmakers and other stakeholders in the debate to find some compromise solution.

She did, however, question the idea of a special session absent an agreement.

“A more ideal situation would be calling them back to vote on something specific, but we’re just not at that point yet,” Cullerton spokeswoman Rikeesha Phelon said.

Likewise, Senate Minority Leader Christine Radogno (R-Lemont) questioned the value of bringing legislators back to town without an agreement on a pension deal.

“The governor did call today to tell me his intentions to call a special session. I appreciate the call — but I’m not sure what dynamics have changed in this pension reform discussion. Clearly there is a rift amongst Democrat leaders,” she said.

“Despite their super majority status, they missed a prime opportunity to enact comprehensive pension reform,” she continued. “We hope that opportunity will still be there now that it will take a super majority vote in each chamber to pass.” The coalition of labor unions backing Cullerton’s pension legislation used word of the Moody’s downgrade to call on Madigan and the House to release the bill, Senate Bill 2404, from the House Rules Committee and allow a vote by the full House.

“Moody’s rating downgrade makes clear that the House of Representatives must act swiftly to finish the work of sound pension reform the Senate has initiated,” the coalition, We Are One Illinois, said in a prepared statement.

“Moody’s has concerns over ‘legal and political hurdles’ and calls for a ‘credible, comprehensive long-term pension funding plan’ to be implemented. They have laid out the path that should be followed, and it clearly leads to [Senate Bill] 2404,” the group said.

That legislation “is the only legal, comprehensive, and responsible pension funding solution,” the unions said.

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