Illinois’ Assault On Public Pensions
Illinois workers and pensioners got an object lesson on the stupidity of supporting state Democratic Party leaders on Tuesday, when Sauron-like House Speaker Mike Madigan succeeded in jamming through legislation that eviscerates core guarantees for public workers’ pensions. The ruling elites’ newspaper of choice, the Chicago Tribune, summed up the outcome in an editorial cartoon that painted AFSCME — one of the public sector unions whose workers are spectacularly screwed by this betrayal — as a castrated dog. Illinois’ fake populist governor Pat Quinn has vowed to sign the bill post haste, while opponents like State Senator Willie Delgado have condemned the bill as “morally wrong, morally corrupt” legislation that will “punish retired teachers, the janitor, the woman who serves lunch to your child in school.”
Too bad for those working stiffs, according to Madigan. The “reason we’re here today … is because the Illinois pension systems are just too rich to be afforded as the state goes forward,” said Madigan in touting the bill.
What Madigan really meant to say was, “We can’t continue to slash taxes for rich fucks by ripping off public pension funds and also meet our obligations to the little people — so fuck those little people.”
Madigan — widely regarded as the most powerful politician in the state — has a long history of channeling the pro-business, pro-privatization, anti-tax agenda of ‘reform’ advocates. And on Tuesday, the ‘reformers’ who embraced Madigan’s bill included little people haters like the Chicagoland Chamber of Commerce, Illinois Chamber of Commerce, Illinois Manufacturer’s Association and the wildly misnamed Civic Federation, which should be called the Rich Fucks Federation because it only cares about the civic well-being of … well … rich fucks. Those same state legislators and their political overlord Madigan are nothing if not consistent. Legislators are also poised to vote on massive tax breaks and corporate welfare giveaways to multi-billion dollar companies.
The bill wasn’t quite good enough for the Illinois Policy Institute, an active player in the right-wing ALEC bill mill, mainly because Madigan’s pension assault doesn’t fully embrace the elimination of all public pensions in favor of 401k plans controlled by the same Wall Street ruling elites who blew up the economy five years ago.
But it’s a start!
IPI’s mouthpieces have been mightily busy in recent months positioning their take on ‘fairness’ — that is, how unfair it is that public sector workers who pay roughly 10% of their annual wages into their own pension funds should get more than the rest of us poor suckers who are forced to rely on the poverty wages of Social Security in our old age. Their right-wing ideology is pretty simple: “Pensions bankrupt companies … and if we’re not careful, they’ll bankrupt the state of Illinois.” By ‘State of Illinois’, IPA and their allies mean rich fucks. By ‘bankrupt’, IPA means ‘tax at a fair rate.’ Right-wing libertarian outfits like the IPI would prefer to see economic safety net structures like Social Security, which pays out an average monthly ‘benefit’ of $1,250, eliminated altogether in favor of ‘market’ solutions like 401ks. Those who were relying on 401k schemes to provide a measure of dignity in their hard-earned retirement know how that worked out. Not: workers lost on average between a quarter and a third of the value of their 401k funds in 2008, and nationally these schemes are woefully underfunded.
Other prospective public pension raiders are more unabashedly enthusiastic about the deal. Cook County Board President Toni Preckwinkle — a Democrat whose county houses Chicago and its suburbs and employs 20,000 workers in the system’s jails, public hospitals and other frontline agencies — says she may use the bill as a template for her upcoming raid on Cook County’s pension fund. Chicago Mayor 1%, Rahm Emanuel — who jammed through NAFTA for Bill Clinton and derailed the public option in Obama’s insurance company bailout scheme — is also a big fan. Literally within minutes of passage, Mayor 1% — who’s facing a budget shortfall driven by the same kind of multi-year failure to pay into employee pensions — issued a press statement touting Tuesday’s legislation as a model for Chicago’s pending assault on worker retirement benefits.
Public pensions in Illinois ARE facing big deficits — structural deficits created by decades of pension raiding and underfunding by legislators desperate to avoid taxing ruling elites at fair rates. Union leaders in Illinois, unfortunately, have been oddly unwilling to take off the gloves with ruling elite toadies like Madigan, who won the state AFL-CIO’s endorsement just last year. The state’s public sector unions also routinely back many of the same candidates that Madigan backs — and who Madigan armtwisted into supporting this sell-out. Now, with this legislative debacle poised to become law, union leadership will move forward with challenging the constitutionality of this week’s pension raid in the state courts.
That might work, or it might not. Although state judges are also public workers — and among the highest-compensated outliers in Illinois’ public pension system — the black-robed jurists who will rule on the constitutionality of this pension raid are exempted from any hit on their personal pensions. With no dog in the fight — but with enormous dependency on kingmakers like Madigan for slating in judicial elections — it’s been argued that relying on the courts is simply one more piece of magical thinking by Illinois union leaders who continue to operate under the assumption that they’ve got to back Illinois Dems because they’ve got no-where else to go.
How, one might ask, can Illinois have a structural debt crisis when the state’s level of funding for services is among the lowest in the nation? Because rather than taxing ruling elites, the state “racked up a ton of debt by using the pension systems like a credit card to pay for public services for which there was not enough tax revenue,” according to Ralph Martire of the Center for Tax & Budget Accountability. Slashing the pensions of public workers will do nothing to fix this problem. Nor will slashing Medicaid — by $1.6 billion last year alone, gutting health care for thousands of poor Illinois families. In fact, this week’s pension ‘fix’ only kicks the can down the road — because the state’s structural deficit persists. What state residents really need is a way out of Illinois’ ginormous and growing debt to — yes — banksters, a debt created because the state has massively borrowed from those banksters instead of remedying its fundamental revenue issues.
And that problem can only be remedied by tackling the state’s hopelessly regressive taxing infrastructure — what one analysis called one of the most unfair taxing states in the nation.
Illinois law essentially bans a graduated income tax — great for rich people and really crappy for the rest of us. That’s generated a dynamic in which the poorest 20% of Illinois families pay twice as much of their income in state and local taxes as the richest 20%. Roughly two-thirds of companies that do business in Illinois pay no state income taxes at all, and grassroots groups are currently fighting for legislation that will at least force state officials to disclose just how terrible corporate tax inequities really are in the state. At the same time, Illinois political hacks have been plenty eager to hand out corporate welfare like Halloween candy, with literally billions of dollars going to banksters and bloodsuckers that range from CME to oil companies.
Curtis Black has outlined in exquisite detail the machinations of the state’s ass-backward taxing structure — one that dovetails flawlessly with the growing income inequality that plagues not just Illinois — although Illinois does worse than most states — but the entire nation. Black’s snapshot summary also paints a responsible path forward: a proposal for a “progressive tax system” that would reduce the tax rate for more than nine out of ten residents and still raise billions of additional dollars a year for vital front-line services — as well as pension obligations the state has been dodging so it can undertax rich fucks.
But that’s a no-go with Madigan. Illinois’ Democratic Party bosses have demonstrated one clear reality this week: they are just not going to allow their puppet legislators to vote on behalf of workers and retirees if they have to choose between the well-being of public wage earners and ruling elites. They’ve also advanced a potent scheme for corporatist raids on public pensions across the nation — although they’re hardly alone. Two years ago another ‘Democrat’, Rhode Island Treasurer and vulture capitalist Gina Raimondo, mounted a not dissimilar assault on public pensions, and there’s clearly a pattern here according to wonks who range from former Kentucky official Chris Tobe to investigative journalist Matt Taibbi.
On the upside, other cities have succeeded in beating back these kinds of predatory initiatives, including Cincinnati earlier this fall. But the Cincinnati push-back on pension raids was grounded in real grassroots opposition — and that was sorely absent in the state capital on Tuesday. While the Wisconsin state capitol was roiled by weeks of protest two years ago when ALEC governor Scott Walker went after public workers’ rights, barely a handful of rank and file members were down in Springfield talking to legislators on Tuesday. “It was beyond weird,” says one union member. “I’ve never seen the Capitol so empty.”
There’s a hard lesson in this for Illinois’ labor leaders, particularly when it comes to truly resetting what has historically been a cozy relationship with Democratic Party kingmakers in the state: you can’t trust Democratic Party leaders like Mike Madigan not to screw you, no matter how much cash and sweat equity you throw at them, because when push comes to shove they’re gonna back the agenda of the rich fucks.
While it’s certainly within the realm of possibility (however slim) that Illinois’ courts might toss the legislation, maybe finally — finally — the rank and file can incite their leaders do what Seattle residents did this fall and recognize that it’s time to walk away from their serial abusers in the Democratic Party. Because, fellow workers, they know which side they’re on — and it’s not ours.
Chris Geovanis is a Chicago media activist, advocacy journalist and member of the HammerHard MediaWorks collective. You can reach her via Twitter @heavyseas, via her Facebook page or at chrisgeovanis(at)gmail.com.