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Pension cuts in an era of robber barons

Updated: December 13, 2013 10:09PM



Legislators make laws to benefit all of us, but I was surprised and repulsed by the sight of Illinois legislative leaders congratulating themselves after voting for deep cuts in public worker pensions earlier this month. Imagine watching hunters, guns still smoking, as they congratulate each other over their kill. Imagine you’re the endangered creature they just shot!

Of course, some people are pleased by this vote. The wealthy and media pundits claim that the public retirement system is “in crisis” and needs to be fixed. By fixed, they mean slashed. Because governments have avoided contributing to pension programs for years, the system was $100 billion underfunded. So they cut $160 billion? One reporter concluded, “[the bill] is as good as Illinois is going to get — something that virtually every major business group in the state recognizes from the Civic Committee of the Commercial Club to the Illinois Manufacturers Association.” The most honest headline was the title of a Chicago Sun-Times story: “Pension Vote Pleases Wall Street.”

It is ironic when wealthy local politicos like Bruce Rauner — he owns nine homes, made $53 million last year, and plans to buy his way into the governor’s mansion — have the audacity to suggest that public workers are a privileged class. Supposedly, we get too much (I’d trade retirement plans with any one of them!) However, few reports explore the impact on the one group with the most to lose — state workers, downstate teachers, and the other victims of this law. Imagine a typical retired teacher living on the average pension — $40,000 a year. In her first five years of retirement, she will lose almost $10,000. Will she sell her car? Can she afford to visit her grandchildren this holiday season? Near the end of her life, when inflation strips most of the value from her pension, will she make hard choices between medicine and food?

This retirement security cut reveals deeply troubling political and moral values held by our elites and the politicians who do their bidding. We live in an era of robber barons and ruling class hubris.

Hedge fund billionaire Ken Griffin cheers as Chicago Mayor Rahm Emanuel closes 50 public schools to save money. Former Motorola executive Tim Cawley controls the Chicago Public Schools’ budget and justifies laying off 3,000 school staff by blaming their pensions. Gov. Pat Quinn cuts home heating assistance, domestic violence prevention, and child care services by blaming retired public servants.

There are real solutions to the budget crisis and we should consider them: demand wealthy residents pay their fair share of taxes, close corporate tax loopholes, and return the CPS portion of the city’s tax-increment financing surplus to the schools. If Illinois had an income tax structure like Minnesota’s, we could support schools at the level recommended by our state’s Education Funding Advisory Board — with an increase of more than $3,000 per student. An Illinois corporate tax loophole bill proposed last spring would generate hundreds of millions of dollars for public services. Note: California passed an income tax increase last year to fund education, and now the state has a $2.4 billion surplus — the first in 10 years.

Is anyone else concerned about signs that our society is rapidly regressing toward the late 1880s? Every day the news is worse. The very day our Legislature slashed benefits for retirees it also promoted tax breaks for Archer Daniels Midland Co. and Office Depot.

Recently, a group funded by the billionaire Koch brothers and others gave the Illinois Policy Institute a $30,000 grant for a campaign to make a progressive income tax politically toxic, according to documents published by the British newspaper The Guardian. This year they hope to work with Mayor Emanuel to cut pensions for workers in Chicago.

Well-funded public schools, public housing, public-sector retirement security, and Social Security are all on the menu. But beware — in the big-game sport of politics, the hunters can also become the hunted. The deeper the attacks go, the wider and more determined comes the resistance.

Karen GJ Lewis is president of the Chicago Teachers Union



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