Jerry Brown’s Flawed Pension Plan

As progressive activists across America organize to fight the looming “cat food commission” proposals to destroy the futures of working Americans by slashing Social Security benefits and raise the retirement age, Jerry Brown is now proposing to do the same here in California – in this case with cuts to public employee pensions:

On his campaign website and in recent comments to the media, California’s attorney general and former governor has advocated rolling back state retirement benefits. Many of his points mirror changes pushed by Gov. Arnold Schwarzenegger and tentatively accepted by some unions, but don’t cut into pensions as deeply as policies proposed by Brown’s Republican opponent, Meg Whitman.

Whitman, the former eBay CEO, wants to raise the retirement age for most state employees from 55 to 65 and require increased employee contributions. New hires under her plan would receive 401(k)-style plans instead of defined benefit pensions state workers now receive.

Brown’s plan would keep defined plans in place, but with lower benefits for new hires, lengthen the retirement age for most state workers to age 60 and increase what workers pay toward their own retirements.

This is not only profoundly unhelpful to those of us fighting against similar proposals that would affect all Americans by cutting Social Security benefits – it’s also a bad idea.

Good pensions are good economic policy. They help fuel economic growth by ensuring seniors have enough to live on in retirement and not requiring financial support from their younger relatives. Retirees play an important role in sustaining the economy with their spending, and with the cost of living in California likely to be high for some time to come, a good pension helps retirees avoid financial ruin at a time when they literally cannot afford to have it.

A lower retirement age also helps ensure there are jobs available to younger workers, especially outside the major metro areas of California, where state and local government are a key source of employment for smaller towns and counties. Raising the retirement age, on the other hand, worsens the already-dire unemployment situation for younger workers and does little to help the older workers.

A two-tier system has also been a failure when tried at the local government level, as Mark Paul writes in today’s LA Times:

The problem is, California already tried this. State and some local governments put in place two-tier benefit systems during the long economic downturn of the 1990s.

That experiment taught two lessons. First, by its nature, a two-tier system provides little short- to medium-term relief for public budgets, particularly in an environment in which governments are hiring few new workers.

More important, long-term savings are equally elusive. A two-tier system is inherently unstable. Setting different levels of pension compensation for people doing identical jobs injects pension envy into the workplace and creates immediate pressure to equalize benefits. California’s last experiment with two tiers was quickly undone when SB 400 in 1999 made the lower tier optional and allowed workers to buy their way into the higher tier at bargain rates.

The workers this hurts aren’t the people who retire with “spiked” pensions and six-figure annual payments. This will instead hurt those public workers making $40,000 and $50,000: The librarians who read stories to children and help people use the Internet to find a job. The teachers who help our children learn. The police and firefighters who keep us safe. The folks who fill potholes in the heat and the rain, who keep the parks in good repair. They’re the ones who will see a lower quality of life and a greater economic struggle under these kinds of pension reforms – which it has to be said are still better than Meg Whitman’s “throw them all to the wolves” approach of shifting to a 401k system.

In this case, Brown’s policy proposal isn’t good policy and doesn’t help progressives with the politics of protecting seniors and promoting economic recovery through new job creation. This move is of course designed to help Brown politically, since he played a major role in the unionization of public employees in the 1970s and is being attacked by Whitman for that as part of her anti-worker, anti-job campaign.

So what are California progressives to do? Judging by the conversations here at Netroots Nation I’ve had with Californians, there’s a widespread sentiment that Jerry Brown isn’t the kind of inspirational progressive candidate we really need, not just to beat Meg Whitman but to lead California out of this crisis and into a more progressive future.

But there’s also a strong commitment to making sure Meg Whitman isn’t our next governor. With her presidential ambitions, her willingness to massively fund the state Republican Party and elect her candidates downticket, and her extreme right-wing positions designed to prolong and deepen our economic crisis by handing more of our wealth to her wealthy friends, Whitman is a huge threat to our ability to build a more progressive California. Defeating her must be a top priority for all of us.

It’s always been clear that Jerry Brown will not be a progressive governor. Then again, it was clear to many of us in 2008 that Barack Obama would not be a progressive president. The argument that I and others at the time made was that Obama offers an opportunity for progressives to make our case and push our solutions – that he would not act as the kind of obstacle that John McCain would have.

As we know, it hasn’t always worked out that way, and the White House has often blocked progressive goals. But they have also proven susceptible to progressive pressure. They moved to finally end the discriminatory “Don’t Ask, Don’t Tell” policy after activists like Lt. Dan Choi and organizations like the Courage Campaign (where I work as Public Policy Director) worked to force the issue. More needs to be done to finish that job, but the White House did feel a need to react to the pressure. And progressive support for Elizabeth Warren may be enough to secure her an all-important nomination to lead the new federal consumer protection agency.

Under Jerry Brown, progressives have a chance to play offense, just as we have under Obama. Under Meg Whitman, however, all we’ll ever do is play defense. For example, Brown has said that he’ll support a tax increase if the voters do, which gives us the ability to go out there and mobilize the public to do exactly that, whereas Whitman would actively fight us every step of the way.

None of this is to excuse those positions Jerry Brown holds that are not progressive. “Elect Jerry Brown so we can fight his pension plan” might not make the best bumper sticker slogan for the November election. But as progressive activists, we cannot afford the luxury of just complaining about Jerry Brown. We have to look at the bigger picture.

With Meg Whitman, massive and possibly irreparable damage will be done to California. If you thought Arnold Schwarzenegger was bad, wait until you see Governor Whitman – she will make you pine for the days of Hummers and cigar tents.

With Jerry Brown, we get an opening. A chance to make California the progressive laboratory that it ought to be. Not by leadership from the top, but by activism from the bottom. It’s not what we truly need. But it’s the situation that’s before us, in an election California cannot afford to lose.

17 thoughts on “Jerry Brown’s Flawed Pension Plan”

  1. Pension plans are under attack just about everywhere. They are going after them in Europe. The neoliberals see the present recession as the great opportunity to put them down the garbage disposal. The two tier plan is the perfect scheme to play one group of workers against another. Unfortunately it often works. Older workers can be persuaded not to oppose changes as long as they think they can hold onto most of what they got for themselves. The fact that it looks like pension cuts are happening everywhere give the public an impression of inevitability. It will take a mighty force to turn this tide.

    I am old enough to have endured Jerry Brown’s previous gig as gov. It was the beginning of my disillusionment. I am not looking forward to the rerun, but I agree that the alternative would be worse. I am already practicing holding my nose for going into the voting booth in Nov.

  2. Then again, it was clear to many of us in 2008 that Barack Obama would not be a progressive president.

     Gee, the creation of a national health care system (however

    flawed)?  Truman/Johnson/Carter/Clinton all failed at this.

    Obama succeeded (Johnson did do Medicare, however).

     Liberals need to realize that, paraphrasing Bismark,

    there are always dismal possibilities in politics.  Obama

    found one and, with a good deal of luck, managed to pass

    something that will help tens of millions of Americans (primarily at the lower end of the income scale) forever.

    That’s damn good.

  3. The former president of the local college Dems described Jerry Brown this way–explaining that it put him 20 years ahead of himself in the 70s, and 20 years behind today. I have to tell you I howled with laughter because it was so spot on.

    But, as Robert so aptly observes, her Megness would be soooo much worse. So I will join Mr. Lyons in holding my nose to vote. I have to say, though, that this election-day contortion has certainly paled for me over the years. Every once in a while I get to skip that step and vote for somebody I really believe in. I’ll be pleased as can be to mark my ballot for my current assemblyman Bill Monning in November. But it isn’t something I get to do often enough to suit me at all.

  4. The private sector does not offer pensions, except to a privileged few (mostly executives).  There are 401k’s and Social Security and that’s it.  In many cases, the employer contributes zero dollars to the employee’s 401k, and in many cases, the employee has no idea how to manage the funds (assuming he or she can even afford to save any money).

    Some public employees have managed to negotiate generous pension programs that allow retirement at age 55 with a quite substantial income.  For some (particularly for police officers) it can be such a sweet deal that they “retire”, get another job, and collect a pension plus a private salary and make more than ever).  For others, the pension helps make up for years of being underpaid, so it’s well-deserved, but private sector workers are often underpaid as well. It would be great if everyone could retire fairly young and live a good life, but that’s not the situation we find ourselves in.

    I think that the only way to preserve pensions for public employees is going to be to improve the situation for the larger group of employees of private industry.  Defined benefit pensions used to be the norm; now at best it’s defined contribution (the company kicks in some amount to a 401k), and many not even that.  What can be done to improve benefits for all employees?  For lower-wage state employees, pensions are an important part of compensation, but it’s expensive enough so that many cities are contracting out those services, and the contractors use employees who make far less and get no pensions.

    It simply isn’t feasible for those representing public employees to treat their own benefits in isolation.  They will lose; the public (including those who vote for Democrats) will demand it.

  5. Without owning our neighborhoods and matching our total progressive universe, precinct by precinct, we’ll always be on the defensive.  

    The CDP consistently ignores the inland districts.  Truly progressive candidates aren’t automatically savvy campaigners, and the progressive donor base in purple districts has no money for the campaign expenses.  Every year we’re written off when the bright thing to do would be to invest in voter registration and progressive media.

    So it’s on unions and activists to leverage union density and build progressive GOTV infrastructure from the bottom up.  CSEA’s San Bernardino and Riverside County field offices have been working on this in conjunction with fellow unions.  We have to prevent the worst case scenario, and hold the electoral power in our neighborhoods to keep the un-Whitman, whomever it is in each cycle, on notice.  Same for all federal and state legislators, we can’t count on candidates.   (A pause, to once again thank god for Boxer.)

    Carl Wood will make a great legislator for the AD65th, but he has few campaign resources.  Manuel Perez in the AD80th was an anomaly, a well known local community organizer with equally dedicated community organizer friends who would volunteer mightily for over a year before there was any $ for staff.  We have to organize a healthy progressive base that doesn’t need that kind of luck in candidates, and at the very least, will be insurance against predatory electeds.

  6. Are you that concerned that dissenting opinion will infect your flock that you would delete a non profane contrarian post?  Why not just delete my account.

    Your inside the box response to dissenting opinion betrays a lack of faith in your convictions…

  7. And if you think there’s ANY chance for a voter passed tax increase this year, you’re on Pluto. Have you seen the national and state temperament?

    We need ideas in the public, not a “me too” candidate.

    Jerry’s going to tack right and get his clock cleaned.

    Seriously cleaned.

    I just hope Meg doesn’t get downticket momentum. Then it’s more than pensions we can say goodbye to.

  8. At least Brown will work on this through the collective bargaining system. One of the most important aspects in electing Jerry Brown as opposed to eMeg is the respect for the rule of law. Republican Governance has shown increasing hostility to this concept. Whatever I think of Jerry Brown, I firmly believe that he will act within the confines of the law. eMeg, not so much.

  9. That’s absurd.  No wonder we’re broke.  Sick , and untreated poor, hungry children.  State workers goofing off in the prime of life.  How nuts can nuts get.

  10. While he’s not perfect, he will make a better governor than Obama has turned out to be as president.

    Then again, it was clear to many of us in 2008 that Barack Obama would not be a progressive president.

    Among the netroots nation proggies, skepticism about Obama prior to his election was… well, let’s just call it “rare” and move on from there.

    With their record, not liking Brown seems like an endorsement to me.

    Let me put it this way: single-payer health care has passed the California legislature three times and has been vetoed by Schwartz. three times. If that bill came to Governor Brown’s desk, I’m damn sure he’d sign it (*), and I’m also damn sure that eMeg would veto it.

    * Thus making him a better chief executive than Obama for certain, given his treatment of “the little single-payer advocates”

  11. Odd that Jerry is complaining about pensions.  “Collective Bargaining” for State workers began when he was Governor in 1982. Arguably, State workers bargaining for higher pensions since then is a direct outcome of his own approval of “Collective Bargaining” for State workers.

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