Commentary Magazine


Topic: State University of New York

The Pension Tsunami

Well, it’s now official. The New York Times has a story this morning, front page, above the fold, entitled “Padded Pensions Add to New York Fiscal Woes.” So the bloated wages and benefits of public employees are now a certified political issue for the 2010 election. If they’re smart, Republicans will grab it and run with it for all they’re worth.

The Times story details some anecdotal doozies, such as the Yonkers policeman whose base pay in his final year was about $74,000. He retired at age 44 and now, at the ripe old age of 47, is collecting a pension of $101,333 a year. Just to add insult to injury, his pension is exempt from state and local income taxes. The retired head of the New York State teachers’ pension fund has a pension of his own of $261,037 from that state job. He collects it even though he now has another state job as president of the State University of New York at Albany, earning $280,000.

But beyond the isolated horror stories, the problem is systemic and not just for pensions, as the Times makes it clear:

By tradition, public employees have said they accepted lower salaries in exchange for better benefits, but the Census data show this has not been true for a number of years. In 2008 the median pay for a worker in the private sector was $39,877, compared with $45,124 for a state or local employee.

Mortimer Zuckerman, of U.S. News and World Report, has a piece in the Wall Street Journal explaining the basic cause of this gathering financial tsunami and why it is a golden opportunity for the Republicans, who owe the public-employees’ unions no favors:

Public unions organize voting campaigns for politicians who, on election, repay their benefactors by approving salaries and benefits for the public sector, irrespective of whether they are sustainable. And what is happening in California is happening in slower motion in the rest of the country. It’s no doubt one of the reasons the Pew Research Center this year reported that support for labor unions generally has plummeted “amid growing public skepticism about unions’ power and purpose.”

Well, it’s now official. The New York Times has a story this morning, front page, above the fold, entitled “Padded Pensions Add to New York Fiscal Woes.” So the bloated wages and benefits of public employees are now a certified political issue for the 2010 election. If they’re smart, Republicans will grab it and run with it for all they’re worth.

The Times story details some anecdotal doozies, such as the Yonkers policeman whose base pay in his final year was about $74,000. He retired at age 44 and now, at the ripe old age of 47, is collecting a pension of $101,333 a year. Just to add insult to injury, his pension is exempt from state and local income taxes. The retired head of the New York State teachers’ pension fund has a pension of his own of $261,037 from that state job. He collects it even though he now has another state job as president of the State University of New York at Albany, earning $280,000.

But beyond the isolated horror stories, the problem is systemic and not just for pensions, as the Times makes it clear:

By tradition, public employees have said they accepted lower salaries in exchange for better benefits, but the Census data show this has not been true for a number of years. In 2008 the median pay for a worker in the private sector was $39,877, compared with $45,124 for a state or local employee.

Mortimer Zuckerman, of U.S. News and World Report, has a piece in the Wall Street Journal explaining the basic cause of this gathering financial tsunami and why it is a golden opportunity for the Republicans, who owe the public-employees’ unions no favors:

Public unions organize voting campaigns for politicians who, on election, repay their benefactors by approving salaries and benefits for the public sector, irrespective of whether they are sustainable. And what is happening in California is happening in slower motion in the rest of the country. It’s no doubt one of the reasons the Pew Research Center this year reported that support for labor unions generally has plummeted “amid growing public skepticism about unions’ power and purpose.”

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LIVE BLOG: The Warm Up

Excerpts are circulating of the president’s speech. The lawmakers are assembling. (Which incumbents want to rush to the aisle to shake the president’s hand, knowing that image wind up in some challenger’s campaign ad?) But this report sort of sums up where we are:

Speaker Nancy Pelosi’s guest list includes the expected array of family, political friends and a few union chiefs, including Richard Trumka of the AFL-CIO and Anna Burger of SEIU. But interestingly, Pelosi’s guest list includes the last sitting speaker to lose election: former Rep. Tom Foley.

Nothing like having those special, special-interest folks with you when the president decries corruption and lobbyists. As for Foley, I’m sure he’s telling Pelosi she  has nothing to fear so long as the president doesn’t double down on healthcare, insist her members vote on repeal of Don’t Ask, Don’t Tell and attack the Supreme Court for defending the First Amendment. Oh, wait.

UPDATE: A reader sends this along: “Foley worked as a lobbyist for Akin Gump Strauss Hauer & Feld after serving as U.S. ambassador to Japan, representing clients such as AT&T, Walt Disney Co., CSX Corp. and the State University of New York. Jim Wright, a Texas Democrat who was speaker from 1987 to 1989, was a consultant for Arch Petroleum Co., although it is unclear if he was ever a registered lobbyist, said the Office of the Historian of the House.” Great image, Nancy.

Excerpts are circulating of the president’s speech. The lawmakers are assembling. (Which incumbents want to rush to the aisle to shake the president’s hand, knowing that image wind up in some challenger’s campaign ad?) But this report sort of sums up where we are:

Speaker Nancy Pelosi’s guest list includes the expected array of family, political friends and a few union chiefs, including Richard Trumka of the AFL-CIO and Anna Burger of SEIU. But interestingly, Pelosi’s guest list includes the last sitting speaker to lose election: former Rep. Tom Foley.

Nothing like having those special, special-interest folks with you when the president decries corruption and lobbyists. As for Foley, I’m sure he’s telling Pelosi she  has nothing to fear so long as the president doesn’t double down on healthcare, insist her members vote on repeal of Don’t Ask, Don’t Tell and attack the Supreme Court for defending the First Amendment. Oh, wait.

UPDATE: A reader sends this along: “Foley worked as a lobbyist for Akin Gump Strauss Hauer & Feld after serving as U.S. ambassador to Japan, representing clients such as AT&T, Walt Disney Co., CSX Corp. and the State University of New York. Jim Wright, a Texas Democrat who was speaker from 1987 to 1989, was a consultant for Arch Petroleum Co., although it is unclear if he was ever a registered lobbyist, said the Office of the Historian of the House.” Great image, Nancy.

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