As Joan has already keenly pointed out on the front page, Steve Kroft presented a stunningly slanted report during last night's episode of 60 Minutes giving anti-union blowhard, and Governor of New Jersey, Chris Christie free reign to distort, twist and lie about the current financial woes facing his, and many other, states. And if you haven't read it, Media Matters does a fine job of calling CBS out on the mat for it.
But as much as I admire Joan and Media Matters for their dedication to calling bullshit, they, like many others when talking about pensions, have overlooked six very important letters - G.P.O./W.E.P.
Follow me over the bump to find out why these six letters make a world of difference when it comes to public pensions.
For those of you who don't know me, I'm a public school teacher in the cash-strapped, pension-challenged state of Illinois, which means I am set to be the recipient of one of those alleged "gold-plated" pensions we've been hearing so much about. So when Kroft served up a softball to allow Christie to go on a rant concerning public pensions, I turned up the volume on my teevee. Here's what I heard:
"Okay. Let's talk about the pension obligations. Forty-six billion unfunded liability for pensions? Sixty-six billion unfunded for healthcare liability?" Kroft asked.
"Yes, Sir," Christie said.
"That's a lot of money," Kroft remarked. "That's a lot of money, even for the federal government."
"That's a lot of money," the governor agreed.
When Kroft pointed out that there are people who think it's worse, Christie said, "Yeah, I think that's an optimistic view. I think that's an optimistic view. Listen, at this point, if it's worse, what's the difference? I mean, it's bad enough as it is, so what's the difference? I mean now, we're talkin' about money that none of us can really get our arms around."
"This is unsustainable, right?" Kroft asked.
"Totally unsustainable. We have a benefit problem," Christie said. "It's not an income problem from the state. It's a benefit problem. And so we gotta change those benefits."
Asked what the reaction to that has been, Christie said, "Well, it depends on where you sit. I mean, I think the general public thinks, 'I can't believe anybody gets a pension anymore. I've got a 401(k). It got killed in the stock market. I don't know what I'm gonna do for my retirement. I can't believe people get a pension anymore.' So I think amongst the broad, general public, they've said, 'Amen.' And I think among the public sector unions, they are yellin' and screamin'."
(emphasis mine)
As I noted earlier, Media Matters called CBS and Christie out on this statement. But even Media Matters misses the real reason that public sector unions are "yellin' and screamin'" - GPO/WEP.
Enacted as a part of the 1977 Social Security Ammendments, GPO, or Government Pension Offset, reduces an individual’s Social Security survivor benefits (available to a person whose deceased spouse had earned Social Security benefits) by an amount equal to two-thirds of his or her public pension. Here's an example:
A widowed retired educator has earned $600 per month from her state retirement plan after 25 years of service. Her deceased husband worked in the private sector and paid into Social Security his entire working life. She normally would be entitled to monthly Social Security survivor benefits of $850.
Because she works in a state where public employees do not participate in the Social Security system, the Government Pension Offset cuts her survivor benefits by two-thirds of her $600 monthly retirement payment or $400. Her survivor benefits instead equal $450 - nearly half of the $850 she would normally receive.
(via IEA)
Then, in 1983, to combat the unintended advantage that the regular Social Security benefit formula provided to persons who also had pensions from non- Social Security-covered employment, the government enacted WEP, or the Windfall Elimination Provision, thereby reducing an individual’s own Social Security benefits earned while working in a job covered by Social Security. Another example:
A teacher taught 17 years in one state, then moved to a different state and taught another 14 years. According to the Social Security Administration, she earned monthly benefits of $540 per month for her contributions paid into the Social Security system while she worked in the first state.
Because public employees in the second state do not participate in the Social Security system, her actual monthly benefits will be cut $196 due to the Windfall Elimination Provision. She will receive $344 per month from Social Security instead of the $540 she earned.
(via IEA)
So when Gov. Chrisite says
I think the general public thinks, 'I can't believe anybody gets a pension anymore. I've got a 401(k). It got killed in the stock market. I don't know what I'm gonna do for my retirement.
what he fails to acknowledge is that a 401(k) (and I certainly don't mean to belittle the loss of a person's 401(k)) is supplemental to their Social Security benefits. But for those of us who don't receive Social Security because we've spent our entire lives as public employees under GPO/WEP, telling us that we're going to have to "share the pain" and "share the sacrifice," is like telling the average worker that the Social Security he's been counting on isn't going to be honored. Despite the fact that public employees have dutifully contributed the required amount (in Illinois we contribute 9.4% of our salaries to the Teacher's Retirement System), the states, who have repeatedly failed to make their constitutionally required contributions and have chosen, instead, to provide tax cuts for the wealthy, are essentially saying "screw you."
So, yeah... When someone like Chris Christie says
"We have a benefit problem. It's not an income problem from the state. It's a benefit problem. And so we gotta change those benefits."
you better believe that "the public sector unions, they are yellin' and screamin'." We're tired of watching our futures being put under the knife while politicians sell us out to their wealthy financiers.