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© 2011 The Union Label Blog & Grassfire Nation
Even the New York Times can’t ignore the fact that Obama’s latest union bailout cash isn’t going to help anyone keep their jobs, and The New York Times is really good at ignoring things that make Democrats look bad.
A few weeks ago Nancy Pelosi called the House of Representatives back into a special session because there was a crisis in education, don’t you know. It was a crisis that she didn’t want to go to waste, naturally. As Speaker of the House she had the power — one likely to evaporate with the 2010 elections — to help Barack Obama give his union pals another $26.1 billion of the taxpayer’s money and she couldn’t resist the urge to fill pockets with other’s people’s money at least one more time.
Early in August, Pelosi triumphantly announced on her Twitter feed, “I will be calling the House back into session early next week to save teachers’ jobs and help seniors & children.”
We’re helping old people, it’s for the children, we are saving teacher’s jobs. It’s a crisis that we can’t ignore, darn it! Yes, Rahm, it’s also a crisis that we can’t let go to waste.
So pass it Pelosi did. Now the feds are sending an additional $26.1 billion to “help” the aged, to save the children and to “save” teachers from being fired.
Only we aren’t. At least we aren’t saving many teacher’s jobs for according to the NYT in most cases those that have been fired will stay fired and those that have been fired won’t be rehired.
One problem with this bailout is that the money won’t be ready for distribution until well into September, up to a month after many schools have already resumed for the new semester. And even for those that won’t have started school yet, administrations are reluctant to just willy-nilly start rehiring teachers that they won’t be able to continue paying after the bailout money runs out next year.
Many administrations just don’t see the point of merely putting off the agony for a single season. School administrators are saying that they see big deficits looming for next year’s budget, so they’d rather save the bailout cash for next year instead of rehiring teachers this year. And administrators also know that the money they’ve been used to so liberally spreading around is not going to be there next year.
“It’s a real double-edged sword,” Michael Drewniak, a spokesman for New Jersey Governor Chris Christie ,told the Times. “This money will not be there next year, and we’re not going to get back up to the funding that they had previously been used to.”
It is not much different in California.
“We’re also looking at a pretty bad budget, so we may decide to hold all or some of the money for the next year,” said Steve Horowitz, assistant superintendent of personnel services at the Pomona Unified School District. He added that the money might be used for bus drivers or custodians, or to roll back five furlough days for teachers.
Unassailable logic that.
So, as it happens this newest gigantic bailout is not going to save any teachers jobs, it is not going to go to re-hire recently laid off teachers, and further more it will just be used by school administrators to pad their budgets for next year causing them to put off the sort of budget reassessments that are much needed.
So why was this done? Because they unions told Pelosi that if she didn’t give them this $26.1 billion bailout they might not work so hard for Democrats in this 2010 election cycle.
Just picture the scene: a thick lipped, broken nosed union “organizer” arrives in Pelosi’s Capitol Hill offices and says something like, “I’d sure hate to see youse guys lose dis election, wouldn’t youse? Gee, it might be swell if we got about $26.1 billion in an envelope this month to help us decide if we’s gunna help youse win, eh? I tink you know what I mean?”
So, to the tune of the Sopranos theme song, Pelosi dutifully fired up her Twitter feed and began stuffing envelopes with your cash.
What a racket, eh?
-By Jason Richwine, The Heritage Foundation
Government workers probably aren’t overpaid, and even if they are, we shouldn’t care. This is Paul Krugman’s message in a recent blog post that takes on the critics of government pay. He is wrong on both counts.
The Heritage Foundation has written extensively about public-private pay disparities, and we have found consistent evidence that government workers are overpaid, even after controlling for skill differences between the private and public sectors. Federal workers receive both wages and benefits above market levels. State and local workers receive sub-market wages, but they make up for it (and then some) with excessive benefits.
Krugman focuses on state and local workers, whose compensation is a bit tricky to compare to private workers. Some analysts calculate total state and local benefits using yearly government contributions to retirement and health funds. However, some states are currently underfunding the pension plans. In other words, what state and local governments pay for these benefits may greatly understate what their employees must eventually receive.
Krugman writes: “The fact that state and local governments haven’t been making large enough contributions to pension funds says nothing, one way or the other, about whether workers are overcompensated.” But of course it does. It means that the way we calculate state and local employee compensation—i.e., including only the funded portion of their benefits—grossly underestimates their actual compensation. Consider the full value of promised benefits, and the public sector suddenly looks well compensated indeed.
This pension shortfall could be $3 trillion or more, but Krugman says this is no big deal: “A ‘trillion dollar liability’ needs to be placed in context: state and local governments spend $2.8 trillion per year.” It still sounds like a lot to me, since $3 trillion could cover all police, fire, court, and prison services at the state and local level for the next 10 years.
But cutting public-sector pay is important for another reason as well. Government officials at the federal, state, and local levels are facing difficult and painful decisions about spending cuts and tax hikes. Getting excessive government pay under control is an excellent means of reestablishing fiscal credibility with economic forecasters, business owners, and—most importantly—voters. It will give long-term budgetary reform a fighting chance of passing.
In an upcoming article for the September issue of The American Spectator, Andrew Biggs and I go into more detail about the importance of the government pay issue. In particular, we cite an IMF study that evaluated when attempts to balance budgets in the industrialized world are ultimately successful. One of the best predictors of success was cutting the government wage bill. Congress should take this lesson to heart.
Like most bills, the legislation meant to reform California’s failing public pension system started out stronger than it ended up. But unlike most bills the final bill has been so gutted, so defanged, that it leaves the pension system in a worse mess than it was when the bill was introduced. Not surprisingly unions are the culprits.
One of the things that the bill was supposed to stop was the practice of “pension spiking.” This is the practice of government workers getting a sudden raise in position, salary and benefits just as they are about to retire. This sudden raise, often instituted only weeks or months before retirement, allows the employee to retire at a higher pension rate than they would have with their last, normal salary.
Unfortunately, the latest amendments to the bill reverses that prohibition in various ways by giving unions even more categories by which to “spike” pensions. The whole purpose of the bill has been subverted by union lobbyists and pliant politicians. In fact, spiking is now open to all union members whereas before it was just the higher-ups and management types that were able to get away with it.
With the bill as it stands now pensions can be spiked by taking the state to court to add uniform allowances, classes and education, shift differentials, vacation and unused sick time, and other categories all of which might be able to be added to a retiring employee’s final pay in order to boost his pension.
If California were truly interested in reform all of these extraneous modes of compensation would be inadmissible as criteria to calculate pensions. The only legitimate criteria should simply be the employee’s regular pay, not all the goodies, giveaways, back room deals, taxpayer ripoffs and buddy-buddy payoffs that union lobbyists have convinced politicians greedy for campaign donations to give them.
Unfortunately, this is not happening with this bill.
From the Independent Teachers for Colorado blog…
Check out this new Independent Teachers video about what happens when a non-union school employee who is forced to opt out of paying union fees every year misses the deadline because of family medical emergencies:
Due to family medical hardships, non-union Pueblo school employee Becky Robertson missed an annual deadline to opt out of union fee paycheck deductions. The union rejected her appeal. Though she had chosen not to be a union member, Becky ended up paying the union hundreds of dollars that could have been used for medical bills and other expenses. Why do Colorado laws allow this type of abuse to continue?
The Obama administration and the Democrat Party has yet again instituted new rules to allow unions to get out of having to report their financial doings to the federal government by again rolling back reporting requirements.
Obviously as far as Obama is concerned “transparency” is one of those things that only enemies should be forced to observe. If you are an Obama friend, no transparency is required.
It is interesting to note the language that Democrats used to excuse their newest roll back of transparency requirements, too (my bold).
“The [Labor Management Reporting and Disclosure Act’s] various reporting provisions are designed to empower labor organizations, their members, and the public by providing certain information about the finances of labor organizations and union officers and employees. A fair and transparent government regulatory regime must consider and balance the interests of labor organizations, their members, and the public, including the benefits served by disclosure, the burden placed on reporting entities, and preserving the independence of unions and their officials from unnecessary government regulation.”
Federal Register, Vol. 75, No. 153; Tuesday, August 10, 2010; Proposed Rules, P. 48416
So how does allowing unions to misuse, abuse, and hide expenditures from their own membership, the public and the government by skipping transparency requirements help anyone but the union chiefs that want to hide what they are doing from the prying eyes of reformers?
Nonetheless, that is what Obama and his Party is doing. This newest rollback of reporting requirements is yet another pay off to unions that have pumped millions into the campaign coffers of Democrats and the president.
But this is nothing new. This is the third time since Obama took office as president that he and the Democrats have weakened rules meant to hold unions accountable for their spending, their salaries, their political activities, and their investments.
Upon entering office one of the very first things that Obama did in the arena of labor relations was direct his Dept. of Labor chief to ease reporting requirements on union finances. Since then it has been discovered that unions have been violating disclosure rules for decades and Obama is making that even easier for them to do.
Then a few months later the Dept. of Labor announced plans to rescind changes made to the reporting rules (the LM-2 reporting form) that were put in place to force unions toward more transparency in their finances.
And what has Sec. of Labor Hilda Solis been more worried about since she took the position? Aside from making the lives of union scammers easier, she’s been trying to make sure that illegal immigrants get “paid fairly” for their labor!
This is all of a piece for the Obama administration. Obama was put in Washington by the millions of dollars given him by left-wing unions and he’s been paying them back since day one even if it means harming the economy and making the lie to his claims that transparency was an important goal for his administration.
Ilyse Schuman has a pretty good run down of what those rules changes are at Lexology.
Specifically, the proposed changes would accomplish the following:
- Return to the pre-2007 practice whereby union officers and employees were not required to report compensation they received under union leave and “no docking” policies established under collective bargaining agreements or by custom and practice of the workplace.
- Exclude union stewards and similar union representatives, such as a member of a safety committee or a bargaining committee, from having to file Form LM-30.
- Create an administrative exemption whereby union officials would generally need to report only loans – such as home mortgages – from bona fide credit institutions if the terms of such loans are on terms more favorable than those available to the public.
- Limit the reporting obligation with respect to interests in and payments from employers that compete against employers represented by the official’s union or that the union actively seeks to represent, modify the scope of reporting with respect to payments from certain trusts and unions, and exempt union officials from reporting payments they receive from trusts or, as a general rule, from unions.
- Hold union officers and employees to the same reporting obligations under the LMRDA.
The narrative is everywhere: public employee unions are bad for good government. This month the meme is echoed by Jarrett Skorup of Michigan Capitol Confidential who wrote a piece giving a brief history of public employee unions and why they are so bad for our government.
As we’ve discussed here many times, the public employee union is a rather new animal born into the world of labor relations. When unions were codified under American law starting in 1936 publlic employees were left out of the deal and they were left out on purpose. As Skorup says, “the thinking was that this would over-politicize government and cause a conflict of interest between unions and politicians.”
A conflict of interest would be as follows: First, government union elects politician by funding their campaign and organizing a massive get-out-the-vote drive; second, politician supports employee pay increases, generous pensions and condition of employment; third, union takes dues (read: taxpayer money) and starts the cycle all over again for selected politician.
Yes, precisely. And that is exactly what we’ve come to see happen over and over again in every state and the federal government.
Skorup goes on to show that both parties are to blame for this, but though Skorup doesn’t say so it is obvious the Democrats are more to blame.
Skorup ends with this:
Politicians granting unsustainable government employee salaries, benefits and pensions is a problem everywhere, but the states with the strongest public-sector unions will have the hardest time correcting it. More broadly, as long as these incestuous relationships between government unions and the political class remain in place and unchallenged, the size and scope of government will continue to grow.
Again exactly right. As we say here at the blog, public employee unions are antithetical to good government. These unions need to be outlawed before we can fix this situation. It’s just that simple.
Eric Odom (Media Director)
Warner Todd Huston