Thursday, June 17, 2010

Public Employee Benefits: Cui Bono?

There’s a compelling story about union greed in this morning’s NY Post-and you can add lust to the list of sins committed by this former labor leader: “A married, obese former president of a Port Authority union admitted yesterday in court to embezzling nearly $300,000 in member dues and using the cash for tawdry hook-ups with prostitutes, casino trips and lavish meals, sources told The Post. Daniel Hughes, 49, who resigned in disgrace from the local Field Supervisor Association, admitted to Judge Eric Vitaliano in Brooklyn federal court that he stole the cash from January 2005 to last December -- bankrupting the account for his 250 members. "This PA employee took advantage of his position as a president of a union and abused it in a calculated and egregious manner," said PA Inspector General Robert Van Etten.”

For which Mr. Hughes will be forced to pay big time at the bar of justice. But, what about the thousands of public employees-bosses and workers alike-who have legally gamed the system and are now the main culprits in the crisis of public governance? This even more serious situation is also featured in the Post, and calls to mind George Washington Plunkitt’s, famous definition of legal graft.”

Here are some of the details: “They're living large at the expense of tapped-out taxpayers. About one out of every seven workers in the state Police and Fire Retirement System who retired last year is receiving a six-figure pension, data released yesterday show. With the state government broke and municipalities crying poverty, 13 percent of cops and firefighters from outside New York City retired last year with fat pensions exceeding $100,000 a year. That's a sixfold increase from 2000, when just 2 percent of cops and firefighters from the suburbs and upstate municipalities retired with a six-figure pension, according to new data compiled by the Empire Center for NY State Policy.”

And no one better symbolizes the incestuous government/labor relationship than the PA’s Louis Echevarria: “Louis Echavarria -- former president of the PA's Lieutenants Benevolent Association -- is No. 4 on the list. He retired last year with a $195,000 pension. As The Post previously reported, he was allowed to rack up tens of thousands of dollars in overtime even though his chief responsibility during his last 18 years was working for his union.”

But as egregious as some of the individual examples may be, it is the system itself-and its political abettors-that is really to blame. Both state and city officials lavished raises and benefits on their government employees with little or no regard for future costs-and now the emaciated chickens are coming home to roost; as Governor Paterson cuts social service and health programs to the bone, and mayor Bloomberg looks to slash libraries and firehouses.

And the phenomenon isn’t limited to New York-as E. J. Dionne chronicles: “While some claim the fiscal crisis in the states is exaggerated, Tuesday's edition of, the Web site that covers the 50 capitals, featured as its top 10 headlines reports from California, Colorado, Connecticut, Hawaii, Illinois and Louisiana, detailing how they are "still struggling" with reduced revenue, lowered credit ratings, employee furloughs and stubborn unemployment.”

Michael Barone-from the opposite side of the political spectrum-agrees with his more liberal colleague, and highlights the underlying problem: “It's a poorly kept secret that government is growing not only at the federal but also at the state and local levels. Especially in some of the biggest states, public employee unions have successfully pressed for higher pay and lavish pensions (one Illinois school superintendent's pension is valued at $26 million) to the point that public employees' salaries and benefits are higher than those of the private-sector taxpayers who pay for them. So while 8 million private-sector jobs have disappeared, the number of public-sector job losses is near zero.”

And he says it’s no wonder that Andrew Cuomo, championing fiscal restraint, is the only Democrat running for governor who has a statistically significant lead: “State governors can't resort to deficit spending without risky gimmicks, and what's more, as Andrew Cuomo's platform suggests, voters don't want them to. As a result, Republicans are leading or running even in governor races in seven of the eight largest states. In California, Democrat Jerry Brown -- at 72, seeking the office he first won at 36 -- is below 50 percent against eBay billionaire Meg Whitman. In Texas, Rick Perry leads Democrat Bill White, who had a moderate record as mayor of Houston.”

So if one of your favorite social program has been devastated by the governor’s cuts-or if your neighborhood firehouse is on the mayor’s chopping block-look to the philosophical underpinnings of the phenomenon; and to those elected leaders like Mike Bloomberg who, continually acting like the irresponsible grasshopper in the fable, saw no need to prepare for the winter to come.

But folks, the winter is surely here. And the next two or three years will not be either easy or pleasant. But if the current crisis isn’t met with the appropriate political response, our short term problems will become intractable-with the Greek crisis as our dystopian model.