STUMP » Articles » Public Pensions Watch: Rhetorical Failure in Illinois » 23 August 2014, 16:12

Where Stu & MP spout off about everything.

Public Pensions Watch: Rhetorical Failure in Illinois  

by

23 August 2014, 16:12

For those who have not caught on yet: yes, I am ultra-conservative (in U.S. terms) and I see a hideous disaster coming for many public pensions (but not all — those who have actually put money by will not get hard hit.)

I also see a hideous disaster coming for Social Security and Medicare, for slightly different reasons.

The underlying problem is similar, though: for these programs to be sustained in the way they are actually operated posits a working population growth rate far beyond that which actually exists.

I will not get into my history as to how I, personally, got embroiled into the public pensions issue. But let’s just say I knew about the problem with Social Security and Medicare years before public pensions.

This is all a preface to the following bit from Bob Lyons of Illinois:

- Bob Lyons represents retirees on the Illinois Teacher Retirement System board of trustees.

I fully expect at some time in the future that as active and retired teachers and public employees we will face a challenge from the forces that want to cut our retirement benefits where they will attempt to change or totally remove the provision in the Illinois Constitution that protects public pensions. The “cost cutters’ would band together and use the ever popular slogan, “They got something that we don’t, so let’s take it away from them!” Since the great majority of people today do not have a pension, that could be an effective battle cry. What could we do, how could we counter their simplistic argument?

The Republican party candidate for state representative for my district, Ramiro Juarez, is running against Fred Crespo, who despite having been first elected with the strong support of the IFT and IEA, voted in favor of SB1. In a “legislative report card” issued by Juarez, who is a public school teacher, Representative Crespo was given an F on “Pensions” because he “voted for unconstitutional Senate Bill 1 which unilaterally reduces retiree benefits.” OK, but it is what is said next that is significant and greatly broadens the impact of the message. He writes, “Can you imagine this happening to Social Security without asking Seniors for their feedback?”

Why didn’t I think of that! The great majority of people do not have a pension, but almost everyone does get or expects to get social security. If they try to reduce our pension benefits by changing the state constitution, and asking people to vote in favor of such an amendment, our response should be, “If they can take my pension, they can take your social security !” And it is an argument that can work because it obviously would be true. If our state government can change and ignore the protection of contracts in Illinois, what is to stop the federal government from doing the same to reduce the cost of social security and other benefits at the national level. At the first mention by an Illinois politician suggesting that the state’s constitution should be amended to reduce our benefits, we should be asking if he will go after social security next. If its good for one then its good for all, and see what they say.

Yes, I quoted the whole thing. I wanted to give Bob full measure here, as opposed to excerpting and being accused of missing some crucial argument. I added emphasis.

What’s stupid about the argument Bob Lyons is putting forth is that people know that Social Security is going to get whacked. (also, if Illinois pensions get whacked, it will be due to Illinois politicians — federal politics aren’t actually closely linked to Illinois politics, as much as the Obama-philes and Obama-phobes think… so there’s a logical problem here, not just the emotional/expectation issue I detail below)

I’m not talking about what people want or think should be. I’m talking about what people think will happen.

So let’s find a few polls run by groups that know how to do legit polls.

Gallup has a good tracking poll on Social Security:

Here’s a note: Social Security is a huge source of income for most retired people currently.

From the Social Security Administration:

Social Security is the major source of income for most of the elderly.

*Nine out of ten individuals age 65 and older receive Social Security benefits.
*Social Security benefits represent about 38% of the income of the elderly.
*Among elderly Social Security beneficiaries, 52% of married couples and 74% of unmarried persons receive 50% or more of their income from Social Security.
*Among elderly Social Security beneficiaries, 22% of married couples and about 47% of unmarried persons rely on Social Security for 90% or more of their income.

Check out that third bullet point in particular. A lot of people do not save for retirement, and even during the “golden age of pensions”, the percentage of people retiring with actual defined benefit pensions was well below half — and no, this does not have a huge amount to do with women entering the workforce.

Okay, so Bob Lyons may think that actual reliance on Social Security may mean younger folks (and current old folks) will freak out about their Social Security getting cut…. except they already expect it to get cut:

According to Pew, 51 percent of Millennials believe they will receive no Social Security money by the time they retire. 39 percent believe the system will provide benefits at reduced levels. Indeed, a mere 6 percent believe they will receive benefits enjoyed by current retirees at the same levels.

A lot of politics is about managing expectations. Younger generations do not expect to get Social Security at current levels (that includes middle-aged me).

If you think it’s a selling point to say “Hey, if they cut the pensions of public employees, they may cut Social Security next!!!!”, don’t blame me when the “unwashed masses” yell back “THEY’RE ALREADY CUTTING SOCIAL SECURITY AND WILL CUT MORE

The Social Security cuts will actually come with the Boomers, because Social Security is in trouble right now (inasmuch the FICA for SocSec is insufficient to cover current benefits — the Trust Fund is a red herring.)

So yes, Illinois pensioners. Go for that argument. It’s weaker than what you could have gone with.

Let me know how it works out for you.

Compilation of Illinois posts


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