Pensions Are A Promise-- A Promise Republicans Are Always Eager To Break

I was somewhat surprised to see a bunch of fringy right-wing organizations, among them the Institute for Liberty, the Taxpayers Protection Alliance and the Competitive Enterprise Institute, hold Republicans' feet to the fire over Vegas plutocrat and Trumpist Sheldon Adelson over the anti-Internet gambling earmark the GOP gave him in the Appropriations Bill in return for the millions of dollars he's spent on their political campaigns. They sent a letter to crooked Houston Republican John Culberson, chairman of the House Commerce Appropriations Subcommittee that reads, in part, "We, the following free-market, limited-government, and freedom-oriented organizations are asking you to oppose language supporting the 'Restoration of America’s Wire Act' (RAWA) that was inserted into the Senate CJS Appropriations report accompanying the bill. This language benefits a narrow range of special interests and tramples on the Tenth Amendment and the right of states to set their own gambling and lottery laws. If passed, RAWA would potentially affect the ability of millions of Americans to play daily fantasy sports and, perhaps most troubling, opens the door to federal government regulation of guns and ammunition sales-- a long time goal of gun control advocates."

Nice they have something useful, for a change, to occupy themselves with. Progressives, however, always have something useful-- usually a lot more useful-- to occupy themselves with. Let me pick an example out of a Make America Great Again hat. Last year Bernie introduced a bill that Mitch McConnell bottled up in committee, the Keep Our Pension Promises Act (S.1631) and would provide more funding for the Pension Benefit Guaranty Corporation (PBGC), specifically for struggling multi-employer pension plans. Bernie's plan would be paid for by closing a loophole in the estate tax and a tax break on sales of expensive art and other collectibles. McConnell and his Senate leadership team shut that right down.

Their typically high-handed treatment of the legislation and their refusal to even allow it to be debated and voted on, has led to what's developing into an existential crisis for another 400,000 workers, as one of the biggest private pension funds in the country faces imminent insolvency.

The Central States Pension Fund has no new plan to avoid insolvency, fund director Thomas Nyhan said this week. Without government funding, the fund will run out of money in 10 years, he said.

At that time, pension benefits for about 407,000 people could be reduced to "virtually nothing," he told workers and retirees in a letter sent Friday.

In a last-ditch effort, the Central States Pension Plan sought government approval to partially reduce the pensions of 115,000 retirees and the future benefits for 155,000 current workers. The proposed cuts were steep, as much as 60% for some, but it wasn't enough. Earlier this month, the Treasury Department rejected the plan because it found that it would not actually head off insolvency.

The fund could submit a new plan, but decided this week that there's no other way to successfully save the fund and comply with the law. The cuts needed would be too severe.

Normally, when a multi-employer fund like Central States runs out of money, a government insurance fund called the Pension Benefit Guaranty Corporation (PBGC) kicks in so that retirees still receive some kind of benefit.

But that's not a great solution in this case. For one thing, the amount is smaller than what pensioners would have received under the Central States reduction plan, and is based on the number of years a retiree worked. A retiree would receive a maximum $35.75 a month for each year worked, according to the fund's website. (That amounts to $1,072.50 a month for retiree who worked 30 years.)

But there's yet another problem. The PBGC itself is underfunded and isn't expected to be able to cover all the retirees in the Central States Pension Fund.

"The fact that the ... PBGC is also running out of money means our participants may see their pension benefits ultimately reduced to virtually nothing when the fund runs out of money," Nyhan said in his letter.

Only government funding, either to the Central States Fund directly or through the PBGC, can fix the problem, he said.

The Central States Pension Fund covers workers and retirees from more than 1,500 companies across a range of industries, but most of its retirees were truck drivers.

A lot of the fund's companies went bankrupt after the trucking industry was deregulated in the 1980s. That's part of the reason the fund is in trouble now. It's currently paying out $3 for every $1 it takes in.

Bernie's bill has been co-sponsored by both liberals-- Sherrod Brown (D-OH), Tammy Baldwin (D-WI), Al Franken (D-MN), Sheldon Whitehouse (D-RI), and Jack Reed (D-RI)-- moderates-- Debbie Stabenow (D-MI), Amy Klobuchar (D-MN), Gary Peters (D-MI)-- and even conservaDem Claire McCaskill (MO)... but no Republicans. Marcy Kaptur (D-OH) introduced a companion bill in the House (H.R. 2844) which Boehner bottled up in 3 hostile committees. Co-sponsors range from the most progressive House Democrats like Alan Grayson (D-FL), Yvette Clarke (D-NY), Judy Chu (D-CA), Steve Cohen (D-TN), Barbara Lee (D-CA) and Ted Lieu (D-CA) to some of the most conservative, like Collin Peterson (Blue Dog-MN), David Scott (Blue Dog-GA), Filemon Vela (New Dem-TX) and Sanford Bishop (Blue Dog-GA). Again, no Republicans. We reached Ted Lieu yesterday who was adamant that pension obligations must be protected. "Pensions are not only promises," he explained, "they are contracts. Government should not renegade on its promises, and cannot renege on contracts. Same with corporations. The Contracts Clause of the United States Constitution protects contracts and we need to fully fund our pension obligations."

If you'd like to help Ted and some of the other progressives holding the Republicans' feet to the fire on pension obligations, you'll find incumbents worthy of reelection by tapping the thermometer:

Wall Street Hates Elizabeth Warren… But They LOVE Hillary Clinton

Why do progressives worry so much about Hillary making a deal with Wall Street to buy her the White House? What difference does it make? What can Wall Street do to hurt America anyway? Nick Confessore's and Amy Chozick's "Thorny Embrace" article last week was just the latest about the love affair between Wall Street and the titular head of the Republican wing of the Democratic Party. "As its relationship with Democrats hits a historic low," they wrote, "Wall Street sees a solution on the horizon: Hillary Rodham Clinton. Mrs. Clinton was the industry’s home state senator, and the financial sector was the second-largest giver to her presidential campaign in 2008. In her post-State Department life, she has been showered with lucrative speaking fees from Goldman Sachs, J. P. Morgan and other financial firms. In her talks, she says it is unproductive to vilify the industry, and she avoids the kind of language that puts off financial executives, as when President Obama referred to “fat cat” bankers in 2009."

Mike Lux, an author and very savvy political consultant who worked in the Clinton White House, told Confessore that "People are going to be in a surly mood, a populist mood. To have a Democrat too close to Wall Street, raising too much money from them, having a ‘We’re all in this together’ message is a big mistake."

Careerists like Clinton and her ilk always push that "we're all in this together" message-- and Democratic voters always buy it. Republican predators love it-- and love Democrats who mouth it… while they laugh hysterically. What am I talking about?

Sir John Templeton was born in Winchester, Tennessee who became a billionaire by pioneering mutual funds and marketing them under the name Franklin Templeton Investments, before renouncing his American citizenship so he could avoid paying taxes on this billions. He died in the Bahamas in 2008 and left behind a far more horrid John, Jr. who has given millions of those untaxed dollars to neo-fascist organizations, particularly anti-gay ones, his specialty. Today, Franklin Templeton Investments is threatening to upend the city of Stockton's bankruptcy deal if the city continues paying former works the pensions they earned.

When you read about Hillary Clinton-- or Wall Street Democrats like Steve Israel, Jim Himes, Joe Crowley, Chuck Schumer, Steny Hoyer and Kirsten Gillibrand-- getting into bed with the banksters, you can think about the crooks at CitiGroup or you can think about the crooks at Franklin Templeton. R.J. Eskow: "Which bank is widely considered too big to fail, needed (and got) a $45 billion government loan during the financial crisis, recently failed a stress test performed by the Federal Reserve -- and has enjoyed a revolving-door relationship with both the Clinton and Obama administrations? If you answered Citigroup, congratulations. Citigroup is back in the headlines as the result of a new settlement with the Justice Department over its mortgage fraud, reportedly for the sum of $7 billion. This deal is being trumpeted as a major win for the American people. It's not. The money's not enough (and some of it probably won't be paid out), the wrong people are paying, and there will be no prosecutions for criminal behavior. From a moral perspective, the lack of prosecutions is probably the most troubling aspect of this deal, and it keeps happening. Somehow the Justice Department is able to reach one billion-dollar settlement after another to resolve charges of massive criminality without indicting a single criminal."

A few days earlier, a more banister-sympathetic Wall Street Journal ran a piece by Dan Fitzpatrick on Templeton's latest aggression against the people of America. And the problem is that Templeton is the tip of the spear and if they can get away with it… well, plenty of avaricious Wall Street banksters are watching closely. "Payments into pension funds," he wrote, "are usually considered sacrosanct, but fights are breaking out around the U.S. over who gets priority when a municipality seeks protection from creditors. The latest battle involves the bankruptcy of Stockton, Calif., and pits mutual-fund giant Franklin Templeton Investments against California Public Employees' Retirement System, the largest public pension fund in the U.S." Franklin Templeton insists that retirees lose their pensions so coupon-slipping bond holders recover an investment-- which, by definition, is a reward for taking a risk. Paying into a pension isn't supposed to be a risk, which is why the returns are so low in the first place.

Many troubled municipalities are grappling with how to bring down pension costs while municipal-bond holders are trying to figure out how to protect their interests before or during a municipal insolvency. Franklin Templeton is separately challenging a new law in Puerto Rico allowing some troubled public agencies to restructure their debt, saying it violates the U.S. Constitution.

A ruling that Stockton's pensions can be curtailed could embolden more cities to use bankruptcy as a way to seek retirement concessions. In December the judge overseeing Detroit's bankruptcy case ruled that pensions aren't entitled to "extraordinary protection" despite state constitutional safeguards against benefit cuts. Calpers has argued in court that the ruling on Detroit's city-run retirement systems doesn't apply to California's state-run plan.

The outcome in Stockton "is being watched by everyone," said Suzanne Kelly, co-founder of Scottsdale, Ariz., pension strategy and restructuring firm Kelly Garfinkle Strategic Restructuring LLC. If the judge rules that pensions can be curtailed, Ms. Kelly added, it could push cities "on the brink" to see bankruptcy as a "feasible option."

Franklin Templeton, which manages assets of more than $908 billion, is the lone creditor challenging Stockton's plan to end a two-year run through bankruptcy, arguing the northern California port city wants to unfairly slice a debt repayment while leaving public pension contributions intact. The city is offering the San Mateo, Calif., firm about $350,000, or less than 1%, back on a $35 million loan that paid for fire stations, a police station, bridges, street improvements and parks.

…The bankruptcy judge is expected to rule on the value of the collateral supporting Franklin Templeton's $35 million loan: two golf courses and a park. It isn't known if he also will rule on the larger question of whether pensions can be reduced.

Stockton, with a population of roughly 300,000, needs the judge to approve its plan to repay creditors before it can exit from bankruptcy. It filed in June 2012 after taking on too much debt and losing tax revenue to the real-estate bust. It was the second-largest financial failure by a U.S. city and one of several California cities-- San Bernardino, Vallejo and Mammoth Lakes-- to seek bankruptcy protection in recent years.

People who vote for Republicans generally know what they're getting. People who vote for corporate Democrats should too.

Paul Ryan's Attack On Military Pensions Has Helped Make The GOP Even More Toxic

You've probably read that Paul Ryan's plan to screw over military families with cuts to compensation and pensions has been backfiring, making the apostle of Randian greed and selfishness even more toxic than he's been in the past. Wednesday, when the Senate voted 95-3 to throw out Ryan's wretched calculations to steal from military veterans for the sake of his Big Business paymasters who hate paying their share of taxes, even the worst of the right-wing extremists like Ted Cruz (R-TX), Jim Inhofe (R-OK), Mike Lee (R-UT) and Ron Johnson (R-WI) voted with Elizabeth Warren, Barbara Boxer, Al Franken and Bernie Sanders against Ryan's ideologically-driven determination to wreck the social safety net.

Now it's becoming clearer to voters in the first district. Last year voters in Kenosha and Rock counties rejected him outright for Rob Zerban and his margin in Racine was tiny. This year voters in Walworth and the Milwaukee suburbs have been telling Democratic canvassers that they're dismayed that Ryan has taken the ax to the pensions of the military men and women who have sacrificed for the country while young Ryan was memorizing his talking points from the Ayn Rand books he reads instead of the Bible.

Wednesday, Politico said Ryan's proposal has backfired-- "highlighting," they wrote, "the perils of scaling back entitlement programs… [M]any of his fellow conservatives jumped ship amid a backlash from powerful advocacy groups for service members and veterans."

The Wisconsin Republican’s gambit was viewed as an attempt to get the ball rolling on military compensation reform-- something top commanders say is badly needed-- and to show that entitlement cuts are possible, that nothing is sacred.

So far, it’s had the opposite effect, unleashing a massive lobbying campaign and forcing vulnerable incumbents to explain to constituents why they voted to cut benefits for those who’ve sacrificed for their country.

Congress has now overturned the short-lived pension cuts, providing political cover for members in both parties up for reelection this fall but undoing a rare victory for those seeking to scale back entitlements.

On Tuesday, Ryan blasted the House bill as taking “a step back” after he cast one of just 90 votes against it. “Compensation costs are hollowing out the Pentagon’s budget,” he said in a statement. “They are taking resources away from training and modernization-- and putting our troops at risk.”

…Under December’s budget deal, working-age military retirees-- some of whom retire with pensions in their 40s after 20 years of service-- would see those pensions grow at a slower pace. Their annual cost-of-living adjustments would be pegged to the rate of inflation minus 1 percentage point. But once they turned 62, they’d go back to receiving cost-of-living adjustments pegged to the full rate of inflation.

Zerban isn't shy about clobbering Ryan over the head with this kind of approach. "We've come to expect intense political pushback whenever Paul Ryan tries to insert his extreme agenda into legislation. While his 'ideas' might be popular with Tea Party groups in Washington DC, voters throughout Wisconsin's 1st district understand that Ryan's policies will have devastating consequences. It was bad enough when he tried to end Medicare as we know it, but not even his fellow Republicans could support his attack on hard-working military families."

If you'd like to help Rob extend last year's victories in Kenosha and Rock counties into Kenosha, Walworth and Milwaukee counties... no contribution is too small.

Santa Clarita Hypocrite Buck McKeon Wants To Take An Axe To Military Pensions

Although he hasn't announced it yet-- maybe because his spokesperson has other issues to deal with-- it's an open secret in Santa Clarita that Buck McKeon is retiring from congress to become a lobbyist for arms manufacturers. The biggest GOP recipient of legalistic bribes from war contractors and arms maker in Congress-- $1,515,700 and counting-- McKeon has always been an advocate for the military. Military men and women, though… not so much.

But it wasn't until he had made up his mind to try to make a fortune as a lobbyist that he started speaking out publicly against veterans and veterans benefits. Now he says we have to cut military pensions to save a budget that enriches his campaign donors and future employers. Or as Lee Rogers put it, "Gut military pensions to save the Pentagon budget? Instead of cutting wasteful spending on weapons the Generals don't want or need? Doesn't make sense unless you're a congressman that benefits from all that wasteful spending."

Rogers is the Democrat who nearly beat McKeon last year and has been working towards completing the job next year… this Democrat:

McKeon, godfather of the costly U.S. drone program and still hanging on as the disgraced Chairman of the House Armed Services Committee: "Forty-four cents of every dollar we spend goes to military personnel. You look at Detroit, you look at General Motors, you look at what happens when you build up these costs, but we aren’t doing anything about it in our [defense] bill this year.”

McKeon, of course, has been part of the Republican Party jihad that depletes the budget by granting rich people and corporations tax loopholes worth billions of dollars annually and by cutting the amount the wealthy pay in taxes. So now he wants to cut pensions for the men and women who have fought and sacrificed for this country. He would have never said it aloud before-- nor would most of his GOP colleagues-- but it's long been part of the Republican Party policy agenda.

After a decade of war, the promises made to those who served in the armed forces seemed sacrosanct. But this statement from a power broker like McKeon shows that military personnel may not be spared as Republicans in Congress seek to maintain the size of the military while also shrinking the deficit.

…Military pensions require no contribution from personnel, which make it the sort of “unfunded” liability the right-wing despises for workers, despite supporting a completely unfunded prescription-drug benefit to Medicare during the Bush administration.

Republicans Ready To Stop Pretending They're Fiscal Conservatives To Steal Worker Pensions

You may recall that millionaire greedhead Ron Johnson campaigned for Russ Feingold's Wisconsin Senate seat by pushing the "China model." He won and perhaps the China model will too. Our ruling elites have certainly giving it a good running start-- NAFTA, financial deregulation, tax cuts for the wealthy and other devices aimed at destroying the middle class and concentrating the nation's ealth in fewer and fewer hands. Soon we'll all be slaves Chinese factory workers. And two of the Republican Party's most prominent-- and influential-- "big thinkers," Newt Gingrich and Grover Norquist, have come up with yet another way to pauperize working families. They're trying to get fellow Wall Street zombie Paul Ryan, House Budget chair, to get behind legislation giving financially strapped states the right to file for bankruptcy and renege on pension and other benefit promises made to state employees. Gingrich: “I... hope the House Republicans are going to move a bill in the first month or so of their tenure to create a venue for state bankruptcy, so that states like California and New York and Illinois that think they're going to come to Washington for money can be told, you know, you need to sit down with all your government employee unions and look at their health plans and their pension plans and, frankly, if they don't want to change, our recommendation is you go into bankruptcy court and let the bankruptcy judge change it, and I would make the federal bankruptcy law prohibit tax increases as part of the solution, so no bankruptcy judge could impose a tax increase on the people of the states.”

Proponents of the measure-- which include Americans for Tax Reform, a Washington lobby group that fights tax increases-- said the legislation is desperately needed to clear the way for struggling states to slash costs before they go belly up, and should be regarded as a preemptive move that could preclude the need for massive federal bailouts.

“It's in the short-term and long-term interests of government workers and taxpayers to start those reforms now, rather than having to pick up the pieces after a crash landing,” ATR President Grover Nor-quist said in an interview.

“We are working with people inside and outside of Congress on this issue,” said Joe DeSantis, a spokes-man for Mr. Gingrich, whom Mr. DeSantis said is considering a bid to be the Republican presidential candidate in 2012.

...State and union officials vow to fight the bankruptcy initiative, which they fear would undermine state autonomy and be used to reduce promised benefits to government workers.

“I am unaware of any public pension plan that is requesting federal assistance,” said Keith Brainard, NASRA research director.

“Exaggerated reports on the financial condition of public pension plans are being used as a scare tactic to justify federal intervention,” Mr. Brainard added.

Said Mark McCullough, a spokesman for the Service Employees International Union, Washington: “This is another right-wing attack on behalf of their (the GOP's) anti-middle class, big-business donor base.

“It would amount to not just another attack on working families, but an attack on everyone from investors to retirees who would see the economy reel from the ripple effects of state bankruptcy as they pursue the goal of making American workers expect no better pay or benefits than workers in the developing world.”

So far, proponents of the legislation said they have not yet recruited a congressional sponsor for the proposed measure. “We're still shopping for the guy who is going to carry it,” Mr. Norquist said.

Nonetheless, union executives are concerned that the proposal-- which has been promoted on conservative websites recently-- is part of a well-orchestrated and hitherto underground campaign now surfacing as Republicans settle into leadership positions in the new Congress.

“This idea carries major negative financial implications for the states, their creditors and the companies that do business with them,” said Charles Loveless, director of legislation for the American Federation of State, County and Municipal Employees, Washington. “A state going into bankruptcy would send shock waves through the states and could very well undermine our fragile national economic recovery,” he said.

“It is incredible to me that proponents of this portray themselves as advocates of state rights when what they're really doing is driving states into the ground,” Mr. Loveless added. “It's clearly in an effort to renege on public employee collective bargaining contracts.”

Ryan is sniffing out the political winds to figure out if he can get away with sponsoring the bill, considering the working family orientation of his own House district, a district that voted for Obama in 2008. Were he to sponsor this bill even the DCCC's hands-off policy towards him might not save his seat. But you can bet your 401K that if these clowns do pass some legislation it will reiterate the sanctity of contracts when it comes to multimillion dollar bonuses for Wall Street banksters who drove the economy off a cliff-- and financed the cushy careers of most of our political class. Feeling proactive at all today? Oh... and Wisconsin... this is what they elected to the U.S. Senate in replace of Russ Feingold (so at least we know who will carry the bill in the Senate):



And... on cue, Krugman column today discusses the canard that the reason the right is winning economic debates is because people have been brainwashed to believe, wrongly, that there’s something inherently moral about free-market outcomes. "My guess," writes Krugman, "is that this is only part of the story; there’s more than a bit of Ayn Randism on the right, but there’s also the appeal of simplicity: goldbuggism is intellectually easy, Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it... [There is a] tendency to ascribe moral value to market values, and [a] need for a counter-narrative. I’m going to think about that; but right now, let me describe how I see the US income distribution in terms of justice or the lack thereof."

The first thing one should say is that our system does reward hard work, up to a point. Other things equal, those who put more in will earn more.

But a lot of other things are, in fact, not remotely equal. These days, America is the advanced nation with the least social mobility (pdf), except possibly for Britain. Access to good schools, good health care, and job opportunities depends on lot on choosing the right parents.

So when you hear conservatives talk about how our goal should be equality of opportunity, not equality of outcomes, your first response should be that if they really believe in equality of opportunity, they must be in favor of radical changes in American society. For our society does not, in fact, produce anything like equal opportunity (in part because it produces such unequal outcomes). Tell me how you’re going to produce a huge improvement in the quality of public schools, how you’re going to provide universal health care (for parents as well as children, because parents in bad health affect childrens’ prospects), and then come back to me about the equal chances at the starting line thing.

Now, inequality of opportunity is only one reason for the inequality in outcomes we actually see. But of what remains, how much reflects individual effort, how much reflects talent, and how much sheer luck? No reasonable person would deny that there’s a lot of luck involved. Wall Street titans are, no doubt, smart guys (although talking to some of them, you have to wonder …), but there are surely equally smart guys who for whatever reason never got a chance to grab the 9-figure brass ring.

So economics is not a morality play; the social and economic order we have doesn’t represent the playing out of some kind of deep moral principles.... [A]nyone who claims that transferring some income from the most fortunate members of society to the least is a vile injustice is closing his eyes to the obvious reality of how the world works.