Sirota and Taibbi: Exposing the Agenda to Fleece Billions from Workers' Retirement Savings [View all]

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http://www.alternet.org/economy/sirota-and-taibbi-exposing-agenda-fleece-billions-workers-retirement-savings



Since the once-great city of Detroit filed for bankruptcy, Americans everywhere are in a panic. Is my city next? Is my state facing financial disaster? From Wisconsin's controversial Gov. Scott Walker to New Jersey's Chris Christie, politicians all over seem to be telling us the answer is yes. The fiscal end is nigh, these leaders say, if America doesn't act soon to slay one of the last great budgetary dragons held over from the entitlement age: our allegedly outmoded, unsustainably expensive system of state and municipal pensions.

In the new fable, state and municipal workers are presented as the welfare queens of our age, historical anachronisms living fat and happy in the competition-free panacea of public service, and shamelessly living off the tax dollars generated entirely by the innovation of America's true workforce - its go-getting private-sector employees, who long ago stopped expecting their bosses to give them real health and retirement plans.

To them, the old-fashioned defined-benefit pension plan, the one that guaranteed a unionized state worker extensive health benefits and a sizable monthly retirement check until his (invariably too-distant) death, is the glaring budgetary inefficiency of our age, the first place we must turn to make the fiscal cuts if we don't want to become the next Detroit.

Pension reform advocates have cited these tales to make their legislative pitches. In state after state, politically active billionaires such as former Enron executive John Arnold, finance-sector think tanks like the Manhattan Institute, and foundations viewed as centrist, such as the Pew Center on the States, have all pushed to cut public workers' guaranteed retirement income, transform pensions into 401(k)-style individual accounts, and turn over the management of pension money to, well, people like the hedge-fund CEOs on the board of the Manhattan Institute. Such reforms are then portrayed as benevolent and transparent initiatives to protect taxpayers and balance budgets.