|
|
 | | From: | Poppy - San Francisco Bay Area | | Subject: | Re: California: Failed State | | Date: | 23 Jan 2005 10:33:12 -0800 |
|
|
 | The greatest problem in California has been gerrymandering so that
there are safe districts for extremes of both the right and left. This
has left those in the middle without representation in the capitol.
The election of Schwarzenegger was the revenge of the moderates. He is
proposing changing the gerrymandering so that the moderates can again
have representation. This will be fought tooth and nail by the
currently elected legislators in Sacramento. In addition, he is taking
on the two most powerful unions, the teachers and the correctional
officers. As Dan Walters said, Schwarzenegger will either be the
greatest governor California ever had or a footnote to history.
|
|
| | From: | arthur wouk | | Subject: | Re: California: Failed State | | Date: | 23 Jan 2005 11:57:33 -0700 |
|
|
| In article <1106505192.518533.166220@f14g2000cwb.googlegroups.com>,
Poppy - San Francisco Bay Area wrote:
:The greatest problem in California has been gerrymandering so that
:there are safe districts for extremes of both the right and left. This
:has left those in the middle without representation in the capitol.
:The election of Schwarzenegger was the revenge of the moderates. He is
:proposing changing the gerrymandering so that the moderates can again
:have representation. This will be fought tooth and nail by the
:currently elected legislators in Sacramento. In addition, he is taking
:on the two most powerful unions, the teachers and the correctional
:officers. As Dan Walters said, Schwarzenegger will either be the
:greatest governor California ever had or a footnote to history.
:
is this what the moderates want? ahnold has joined up with the back to
mckinley crowd.
Schwarzenegger Aims at State Pension System
By JOHN M. BRODER
L OS ANGELES, Jan. 22 - Gov. Arnold Schwarzenegger, echoing language
used by those who claim Social Security is headed for a crisis,
contends that California can no longer afford a generous traditional
pension plan for state employees and teachers and should force all
new workers into a 401(k)-style plan of private accounts.
California's $300 billion pension system for its public employees is
the largest state system in the nation and as early as this summer,
Californians will be asked to vote on the proposed changes. The
change that Mr. Schwarzenegger has endorsed is supported by a number
of Republican state lawmakers and is driven by the same ideology
behind the effort to transform Social Security.
The outcome of the vote in California, pension experts and political
analysts say, will not only have an impact on the state pension
system, but will also provide an important marker of public opinion
on proposed changes to Social Security.
Mr. Schwarzenegger, in his State of the State address earlier this
month, described California's pension system as "another government
program out of control," careering toward fiscal ruin. He cited the
state's obligation to inject $2.6 billion into the system this year
to keep it actuarially sound, compared with $160 million four years
ago.
The impetus for Mr. Schwarzenegger's plan comes from some of the same
antitax advocates, free-market enthusiasts and Wall Street interests
pushing President Bush's Social Security initiative. Grover Norquist,
the president of Americans for Tax Reform, a Washington lobbying and
research group, has endorsed the plan. The Howard Jarvis Taxpayers
Association, in California, is sponsoring a similar measure. The
Jarvis group plans to put its proposal on a statewide ballot if the
State Legislature does not act on the governor's plan.
Although Social Security and the California pension plans have
important differences and different long-term challenges, the
proposed solution - private accounts managed by individual workers
with a predetermined contribution by employers - is basically the
same.
"They certainly are kissing sisters," said Stephen Moore, the former
director of the conservative Club for Growth who is now the president
of a political action committee, the Free Enterprise Fund, which is
dedicated to remaking Social Security. "These are proposals that aim
toward giving people real ownership and a real stake in how the
economy and the stock market perform."
Mr. Moore, who has advised Mr. Schwarzenegger on economic policy and
participated in an independent audit of state finances last year,
said that California tends to lead the nation on social policy. If
California moves from a traditional defined-benefit pension plan to a
401(k)-style defined contribution plan, the nation is likely to
follow, he said.
The proposal would affect the California Public Employees Retirement
System, known as Calpers, which handles the accounts of 1.4 million
state and municipal workers and retirees. It has $178 billion in
assets and is one of the largest pools of investment capital in the
world. The proposal would also cover the California State Teachers'
Retirement System, with 750,000 members and $116 billion in assets.
Although Mr. Schwarzenegger described the plans as a looming train
wreck, even advocates of privatization in his own administration say
the system is currently sound. The plans, taken together, are nearly
90 percent funded, a level that most experts consider quite healthy.
"We're not warning of imminent collapse," said Tom Campbell, an
economist and former member of Congress who is the state's new budget
director. "There is a potential danger for the state to have a
defined benefit system, and to the extent we can move away from it,
as many private employers in America have done, we should do that."
The danger, as Mr. Campbell and others describe it, is found in the
vagaries of the stock market and the tendency of the State
Legislature to award generous new retirement benefits in flush times.
Unlike Social Security benefits, which can be changed by act of
Congress, benefits granted to recipients of public pensions, at least
in California, are virtually untouchable.
Opponents of the plan, who include almost all Democrats in the
Legislature, state employee unions and the trustees of the pension
plans themselves, say that the plans have been well managed and
provide a critical source of income security to workers who sacrifice
pay in their working years to toil in the public sector.
The state contribution to the system this year is large because of a
downturn in the market, not because of extravagant benefits paid to
retirees, they said. The state has benefited in the past from a
strong stock market and in some years has had to make no payments
into the funds.
"Calpers investments have generated $173 billion over the last 20
years," said Patricia K. Macht, a spokeswoman for the fund. "Why
would anyone want to throw away the chance to add another $173
billion over the next 20 years? People see this as an opportunity to
use a temporary downturn to drive a stake into the heart of a
well-funded system."
Some opponents of privatization also detect a subtler agenda among
those pushing private accounts - to silence the voice of workers and
their pension fund managers, who oversee some of the largest
institutional investment accounts in the nation.
Calpers has been a leader in an effort to bring greater
accountability to corporate boardrooms. It pulled its money out of
tobacco companies in the 1990's, voted its shares against Michael
Eisner, chairman of The Walt Disney Company and leaned on the
Philippines to do more to protect worker health and safety.
Critics say the role of pension funds is to safeguard their members'
money, not make social policy.
"There is an overriding issue of what happens when you have these
superlarge retirement systems straying from bottom line of the
benefit of members and straying into corporate governance, even
social engineering," said Jon Coupal, president of the Howard Jarvis
Taxpayers Association. "A motivation for us, as you move to a system
of individual accounts, is that over time you will depoliticize the
retirement system in the state of California."
Supporters of Calpers and other traditional public pension plans
intend to vigorously contest an overhaul and say they expect a costly
battle if the plan makes the ballot.
Richard C. Ferlauto, director of pension investment policy for the
American Federation of State, County and Municipal Employees, said
that Mr. Schwarzenegger and others were manufacturing a crisis to
justify sweeping changes to the retirement systems that millions of
workers rely on and to throttle the influence the workers wield
through their pension plan investments.
"The debate around private accounts will be fought in California
before the outcome of the Social Security debate is determined," Mr.
Ferlauto said. "The attempt in California is the stalking horse for
whether private accounts can be sold to the American public.
Copyright 2005 The New York Times Company |
--
getting out of bed in the morning is an act of false confidence
- jules feifer
to email me, delete blackhole. from my return address
|
|
| | From: | El Castor | | Subject: | Re: California: Failed State | | Date: | Sun, 23 Jan 2005 11:18:20 -0800 |
|
|
| awouk@blackhole.nyx.net (arthur wouk) wrote:
>In article <1106505192.518533.166220@f14g2000cwb.googlegroups.com>,
>Poppy - San Francisco Bay Area wrote:
>:The greatest problem in California has been gerrymandering so that
>:there are safe districts for extremes of both the right and left. This
>:has left those in the middle without representation in the capitol.
>:The election of Schwarzenegger was the revenge of the moderates. He is
>:proposing changing the gerrymandering so that the moderates can again
>:have representation. This will be fought tooth and nail by the
>:currently elected legislators in Sacramento. In addition, he is taking
>:on the two most powerful unions, the teachers and the correctional
>:officers. As Dan Walters said, Schwarzenegger will either be the
>:greatest governor California ever had or a footnote to history.
>:
Read this, Arthur.
Sacramento Bee
(SACRAMENTO BEE) - No single act or piece of legislation by itself
created the pension crisis that threatens to overwhelm the state and
many local governments in California. The pension mess stems from a
series of bad decisions, of fiscally reckless votes (many of them
self-serving) in the Legislature, in city councils and county boards
of supervisors.
Still, in the state's downward spiral into a deep hole of pension
debt, the passage of SB 2465 more than a decade ago stands out. On the
last night of the 1990 legislative session, the innocuous contents of
SB 2465 were gutted on the Assembly floor and new provisions added
that changed state retirement rules to allow pension benefits to be
based on an employee's highest annual salary rather than the average
of the last three years of employment.
Without benefit of a committee hearing or any serious public analysis,
the Assembly passed the bill at 2:45 a.m. on a 71 to 1 vote.
(Then-Assemblyman and now Sen. Tom McClintock, R-Thousand Oaks, cast
the only no vote.) The state Senate approved it later that morning 37
to 0, and Gov. George Deukmejian signed it 20 days later.
At the time the bill passed, the one-year pension formula was
projected to cost an additional $63 million a year. Costs have
ballooned to more than $100 million annually since then, just part of
the reason state pension costs are expected to triple from $1.2
billion in 2002-03 to $3.3 billion by 2009-10.
SB 2465 was a bad deal for the public and taxpayers in every way.
Beyond extra costs, the new law created financial incentives for
experienced managers to leave government service early, often at the
peak of their careers when their skills and services were most needed.
The passage of the law is a lesson in the flaws of California state
politics. Then as now, the state was in a budget squeeze. To balance
the budget without a tax increase, the Deukmejian administration and
the Legislature wanted to delay a required contribution to the state
pension fund, the California Public Employees' Retirement System. To
buy the acquiescence of public employee unions, Deukmejian granted
state workers something they had coveted for a long time: the
expensive final year pension formula.
It should have been obvious at the time that the price was too high.
It surely is obvious now. If California is serious about reforming its
overloaded pension system, it should do what many local governments
have already done and repeal the one-year pension formula.
Yes, that would mean that new hires will get less in retirement than
current workers receive. But that may be necessary. If California does
not do something to reduce its overall retirement costs, the public,
stuck with mounting pension bills while government services shrink, is
likely to do something even more drastic, like repeal guaranteed
benefits.
http://www.modbee.com/24hour/opinions/story/1958419p-9957988c.html
|
|
|
