The State of Public Pension Plans
http://thedianerehmshow.org/shows/2011-02-23/state-public-pension-plans
Cash-strapped state governments are seeking ways to shrink enormous budget deficits. Many are targeting public employee retirement plans and collective bargaining rights in efforts to cut expenditures. All of this is playing out in highly charged political environments. Some see it as a battle between public employees and taxpayers. Yesterday Democrats in Indiana left the state rather than vote on Republican-backed legislation to weaken unions. Grass-roots protests that began in Wisconsin have spread to other states. We'll talk about proposals aimed at addressing concerns with public employee retirement systems and the politics behind them.
Guests
Rep. Devin Nunes
Republican U.S. congressman representing California's 21st Congressional District.
Sen. Lena Taylor
Democratic state senator, Wisconsin's 4th Senate District.
Ross Eisenbrey
vice president of the Economic Policy Institute.
Sara Murray
economics reporter, The Wall Street Journal.
Andrew Biggs
resident scholar, American Enterprise Institute.
Comments
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hainc on February 23, 2011 @ 1:06 pm wrote: "ET, Your refutation of Rose is lacking, lacking facts and relevance. Please try again."
On the contrary, it had as much fact and relevance as her Comment. She cited her personal experience, I cited mine. Our experiences are comparable, what differs is our opinions based on those experiences.
Or, are you referring to the idea that repeating something doesn't make it true. Well, we know you disagree with that, given the many times you keep repeating that lie about what Pelosi said.
As for my "race to the bottom" remark, study the history of 19th Century America when there was a similar race. It wasn't called the age of the "Robber Barons" for nothing!
This is hilarious. Bankers ruin the country but schoolteachers get burned. Let's not complain about the deplorable state of education if we are not even willing to protect the people who are still willing to do the hard work of teaching.
Yep, Roland. They threatened to burn the books unless we let them write and teach their lies. Now they're burning teachers because it requires an education to become one.
hainc on February 23, 2011 @ 1:44 pm wrote: “The fog was caused by three thousand pages created in a backroom with under the table deals for special interests in Nebraska, Louisiana, California ...”
Still can’t stop misrepresenting the facts (a polite term for lying), can you? The two laws (there are two of them, remember) together are less than 900 pages in length. I know because I bothered to download them, and have been reading them.
If those deals were so “secret” (“backroom”) how come everyone found out about them in time to protest and get them removed before the final vote? (And by the way, the only reason those deals were made was because the Senate needed 60 votes to end the Republi-Con filibuster. Too bad we couldn’t send the police to force an up or down vote on the bills themselves, the way Walker wants to force a vote on his measures.)
“now we're all paying from the job destruction it's fostering.”
- Yeah, because the economy was booming, and unemployment was so low, before the law was passed (in 2010)!
“As you point out Democrats have been in control of Congress since 2006 and a recession began soon thereafter.”
- Oh, of course, and the toxic mortgages that started the meltdown were only issued starting in 2007, and there were never any credit default swaps or derivatives till then too.
(By the way, the Democrats only won an election in 2006, sir, they didn’t “takeover” Congress until 2007. Even then, they only had a 31 seat margin in the House, an even split in the Senate, and didn’t have the Presidency. So, the Republi-Cons had plenty of power to block anything the Democrats did. What the Democrats couldn’t do was force the Bush Administration to do its job and regulate the financial industry.)
TO BE CONTINUED
“They killed an economic miracle . . . .”
- Really? Unemployment in 2005 was 5.1%, in 2006 and 2007 it was 4.6%. So, by your argument, the “miracle” continued through 2007. On the other hand, when Bush took office it was even lower (4.2%) and it never got that low again! (But it did go much higher for most of his term, and rose again at the end) Glory, hallelujah!
“with their spendthrift ways.”
- You mean unlike Reagan (who increased the deficit by 97%), Bush I (increased by 90%), Bush II (increased by 458%), or Clinton who created a surplus and decreased the deficit by 193% (oh, but he was a Democrat, so that doesn’t count).
For anyone interested in the source for these statistics, they come from The World Almanac of 2010, pages 17, 63, 108 and 439 (not necessarily in that order).
To qoute a "Sienfeld" episode, this is "Bizzaro World", where things that shouldn't happen do and things that do happen shouldn't. It is so maddening to me and everyone I know that there has been and continues to be a massive transfer of wealth form the shrinking middle class to the rich and their ballooning Wall Street accounts. Why on God's green earth would the Republicans keep giving more tax breaks to the rich and corporations, while taking away benefits and wages from middle class families? These politicians, who continue to receive generous pay and benefits, are laughing behing closed doors that people are still dumb enough to vote for them! My wife is a teacher, I am a telephone worker, both college educated and union members. We, like most peope, are just trying to give our kids a better life. Go ahead, take a teacher's pension away - it's only 30 years of hard work in trade for ONE millionare's tax break this year. Wake up America, we are all losing (except the top)! Also, is it just coincidence that as soon as Bush passed his tax cuts for the rich that we have now been in recession for almost a decade. I thought that they would CREATE jobs if they had more money? Hmmmm...
Roger: not so that labor pays all the benefits out of their own pocket. For instance somebody working for a private corporation, an employee pays part and the company pays part. In the public sector not all beneficaries pay out of their own pocket.
In San Antonio,Tx. The police and their family do not pay one dime of health care cost thanks to a sweetheart deal that was done between the city and unions back in the 90's. No deductables as well. This includes dental health.
We the taxpayer by our property taxes are paying for these costs.
Please don't get me started on a "one payer system". We will have a debacle just like what is happening in Medcare and Medicaid. How many off your doctor friends are taking Medicare patients if at all.
Martin Carney:
How much is the government is taxing from your pay check to pay from those to produce to share with the rest of the community? Last I heard while wages over the last 30 years have gone up by 3000%, income has gone up 300%.
You must live in a high tax state.
Remember what obama said during the campaign, "it is a right for home ownership". I thought it was a priviledge, same as a job.
My wife is a teacher as well and I am battery sales rep. We both are college educated. The kids go to private school. We have a 2800 sq. ft house. Guess what, we do not have a state income tax that is why we have a better standard of living.
Hold on John Caruso:
If I remember correctly the budget that passed in 1993 elimanted 1% luxuary tax. This happen because in the NE yacht builders and other industries that catered to the wealthy were some of the biggest employer in the NE and saw their businesses go in the tank. Wealthy people stop buying yachts. The senators in these NE states were and are some of the biggest tax Democratic liberals.
Why do you not mention that 1% of the US population pays 38% of all taxes and 10% pays 90% of the total tax bill? Do you not remember during the debates McCain asked Obama about the 50% of the US that do not pay taxes?
I tell you something the Bush tax cut did work, I remember 2006 when unemployment was 4.7%. I am in the middle class and we took more on our returns than under Clinton. By the way Obama told us during the campaign that 96% of all people would get a tax cut under his administration. Guess what that cut amounts to $12 a paycheck or $625 a year.
Guess that "Hope and Change" is really working.
Hey Glen Caton:
Why did these city, public government entities promise so much to these unions? How about having the 50% of the US population that does not pay Federal Income tax begin paying now? Do not think their are that many rich people in that group.
meangreen on February 23, 2011 @ 7:12 pm wrote: “Roger: not so that labor pays all the benefits out of their own pocket. For instance somebody working for a private corporation, an employee pays part and the company pays part. In the public sector not all beneficaries pay out of their own pocket.”
For once we agree about something - well, partly. I think Doctor Roger H. Strube, M.D. expressed himself poorly, and also made too sweeping and overbroad a statement (February 23, 2011 @ 10:27 am). I believe he was trying to say that those benefits are part of the employment compensation package, and that employees receive health insurance instead of extra salary. In that sense, “labor pays all the benefits” since those benefits represent money that could have been received directly as wages.
That, in fact, is how it works throughout America, in both the public and private sector. When an employer provides health insurance the premiums paid for that insurance is not included as part of the employee’s income, so the employee pays no income tax on it (even though it’s obviously very valuable). Furthermore, the employer gets to deduct the cost of that insurance on its taxes - so in the end “we the taxpayers” are effectively subsidizing even private employment benefits, since the revenue “lost” through this system must be made up somewhere else, for example: through higher overall tax rates, or through deficit spending.
Oh, and by the way, every private job I had which provided health insurance never made me pay one penny for it, or for other benefits. So your statements are just as overbroad and sweeping as Dr. Strube’s were.
TO BE CONTINUED
Oh, and in answer to your question about how many doctors are taking Medicare patients: well, in Arizona it’s apparently enough that our government wants to end it’s Medicare program (AHCCS) altogether. You know, to save money on the payments the government has to make to the doctors treating those patients!
meangreen on February 23, 2011 @ 7:21 pm wrote: “Last I heard while wages over the last 30 years have gone up by 3000%, income has gone up 300%.”
I’d be fascinated to know the source for that statement. How about it? I showed you mine, now show me yours.
meangreen on February 23, 2011 @ 7:50 pm wrote: “How about having the 50% of the US population that does not pay Federal Income tax begin paying now? Do not think their are that many rich people in that group.”
More simplistic rhetoric on your part (I ignored your prior Comment for that reason, but this one I can’t). Let’s ask why people don’t pay that tax. Could it be they have incomes too low? So, you propose cutting the marginal tax rates on the wealthiest who can afford to pay more, and offset it by increasing the taxes on those who can’t. What’s wrong with that picture?
And what about the “poor”, “starving”, corporations that manage to rack up billions in profits (and pay their officers generous salaries, perks, and bonuses) yet pay no taxes? Are they included in your 50%?
What about people who live off generous trust funds that invest in tax-free bonds? You know how much they pay? ZERO! Are you including them?
And as for people who’s investments are taxable, do you know how much of that is taxed to pay for the FICA (Social Security), Medicare, and Medicaid taxes (the “payroll” taxes)? As the term indicates, the answer is again ZERO! Those taxes (the most regressive in our nation) are only imposed on “earned income” - wages and salaries. So are the people (mostly wealthy) whose income is largely or solely derived from such sources (and thus pay little or no payroll tax) also included in your 50%?
TO BE CONTINUED
Finally, let’s not forget that even for earned income there is a great disparity between the ordinary “working stiff” and those at the upper income levels. The payroll taxes are an example of the Republi-Cons’ dream: a “flat tax” with everyone paying the same rate (about 15%). Except for one thing: there’s a cap on the amount of income subject to that tax (I believe it’s approximately $106,000). The result? People earning $250,000, $2,500,000, or higher, pay a lower percentage of payroll tax than the ordinary “working joe or jane”!
Yeah, let’s tax those 50% freeloaders - just don’t assume you know who they are.
Meangreen: Interesting stats, probably from Glenn Beck website. The facts are Republicans are taking AWAY from the middle class and TRANSFERRING it to the wealthy and corporations, while using the guise of "job creation" as an excuse. Every intelligent economist has said this is not good for the economy. It will be funny to see how many rich people don't show up every morning at all the breakfast joints while the average joe strives to pay for all the top tiers tax breaks. The thruth is the top 1% is making more than the bottom 50%, and for 40 years the middle class wages have been stagnant, while the top 2% has increased 500x, the top 10% by 100x. Only ignorance will stand in the way of someone seeing the truth, and that truth is our middle class losses are paying for the rich to have a 4th or 5th house, and for companies to get tax breaks while sending more jobs overseas......this is about GREED.
Public employee unions are exactly like industry labor unions. The employer has the high ground in that they decide who they hire and fire, and have the salary money. Unions allow employees a realistic chance to have a voice in conditions.
I am a professor at a public university, and I make about 12-15% less than my colleagues at comparable private institutions. Further, if I went to work in private industry I could double my income. So, obviously my union does not have the state government in a usurious hammerlock. Collective bargaining is just that, bargaining. If the employer (in this case the state) cannot bargain effectively, how can they possibly argue that the union is to blame? In my observation and experience, labor unions have been quite aware of the economic problems of the last couple of years, and have worked with their membership and with the state to be flexible in response.
I do not understand how the Governor of Wisconsin (or other states) can imagine that destroying collective bargaining will fix this year's budget shortfall, unless he plans to fire state employees wholesale, once he has forced employees to relinquish rights to fair treatment. Perhaps this is his intent, but I wish he would be honest about it and just say so plainly. It doesn't sound like he has made any attempt to work with the employee unions. Instead he demonizes them. Does he not realize that these people are citizens, taxpayers, and voters? They are, in fact, EMPLOYED, and in this time of high unemployment, they are the ones who have an income to support the economy.
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Martin Carney:
Don't have time to listen to Glen Beck. Are you going to believe "every intelligent economist is going to say this and that". How many of these intelligent economist have been ever so wrong. Some person in main street, I would believe in more than some egg-head that is nothing but book knowledge.
Da. What would you expect that the "1% is making more than the bottom 50% . Sure seems that with their 500x increase in income they are still paying more in taxes. Have you seen how much GNP has grown in 40 yrs. When you have 50% of the US population not paying taxes, that sounds pretty good to me. The rich are only 1% of the population.
Funny you mention that the last 40 years wages have been stagnant. Have you seen what the average yearly wages have been over the last 40 yrs. You probably are not even 40.
The average house size has increase in the last 40 yr. Food cost as a percentage of pay is less. Most middle class have two cars, computers,etc.
Martin ,you keep seeing the glass half empty.
But I got to same taxes have gone higher as a whole for the middle class vs wages.
So what if rich people have all those houses. Do you think that they did not work hard and sacrifice to get those things. Even the Koch brothers worked hard to get what they got. Martin you sounds like one whinny liberals that believe in class warfare.
Etaoin:
The wealthy under the flat taxes do not pay a lower rate and if I heard correctly there are exemptions in flat tax for lower income earners. But once again I am not all that familiar on how it works.
Now before you get further into the working stiff vs upper income, you did not mention what the total tax bill will be for an upper income individual. For instance a person living in New York making $250,000. He automatically pays 10% state income tax, 15% Federal Income tax. Total is $62,500. If he lives in NYC there is another local tax. This does not even include property taxes and all the other taxes that are paid. Then you have that Regressive Tax.
Don't tell me that the Liberals/Democratic have not hurt the people that produce. Remember also, small business is hit because they file under a Chapter S or something like that.
I am not an accountant so I do not know the specifics. It is not just NY but other NE states that have had the Democratic politicans for sometime.
To Etaoin:
Response to her comment on 2-24-11, 5:10 pm.
I am sorry that I cannot response in a timely matter being that I am one of those working stiffs.
What I disagree about when I stated 50% of the population does not pay taxes as McCain said during the campaign is that poor people do not pay federal and state income tax. Yet they get a $500 earned income(welfare check) back? Is that fair to not pay into the system and get $500 back in return.
As for corporation not paying taxes. I use a corp credit card and have to pay state, Federal, and other taxes when staying at a hotel or renting a car. I guess they get it back at the end of the year.
Let get back to your trust funds. Trust funds are taxed but at a lower rate than income. This is why the Kenndy's, Duponts, etc can pass their wealth generation to generation. You and I can buy a whole life insurance policy and pass it on to our children tax free and we are not rich.
When we have investments like stocks and mutual funds, 401ks, IRA's, municipal bonds(tax free), these are taxed when we cash out on them. Don't know what coffers they go into when sold.
Do you realize that if I am a middle class retiree earning SS and I have to take money out of my IRA, that I am taxed on that above a certain level. SS is a tax. I paid it with FICA, Payroll during my employment.
Don't ask me the specifics because I am not an accountant or CPA. Perhaps one of these professional in this area can break it down further?
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