Meet public pensions' No. 1 enemy

Well Pete Abbate found a great issue to gain the votes of teachers and other affected workers.
A fantastic reason to be concerned about collective bargaining and public unions, or public unions in general.

CONTROLLER JOHN LIU'S PENSION REPORT LAYS BLAME ON WALL STREET FAT CATS

Adam Lisberg, NY Daily News

Sunday, April 10th 2011

You probably didn't hear much about city Controller John Liu's new report last week, but you'll definitely hear more by 2013.

Liu's team analyzed New York's skyrocketing pension costs - the ones Mayor Bloomberg hammers unions about - and concluded half the problem was the fat cats on Wall Street, not the little guys in city jobs.

It was a dry study that got little play, but it lays the groundwork for Liu to present himself as the voice of working New Yorkers who think they're not getting a fair shake.

Liu, like plenty of other ambitious pols, is eying a run for mayor when the Bloomberg era ends in 2013. And he's not the only one who thinks the path to City Hall will be to stick up for the little guy after 12 years of a billionaire mayor.

"Every mayor gets elected as a reaction to the previous mayor," said longtime consultant George Arzt. "People are going to want the stability of Bloomberg, but they want a change."

Already, Teamsters Local 237 Gregory Floyd is talking about running for mayor as "the labor candidate" - and says Liu's report helps push back against Bloomberg's pension argument.

"This report makes everyone aware," Floyd said. "It's an important document to help people understand that once again Wall Street gets away with something."

The city will pay a staggering $8.4 billion for worker pensions next year, up from $1.5 billion in 2002.

Bloomberg is right that it's a key factor in forcing deep budget cuts and layoffs - and Gov. Cuomo has made the same argument at the state level.

The mayor and the governor lay the blame with workers who rack up overtime in their final years as well as a system that assumes Bernard Madoff-like returns in the pension funds.

Liu's study found all those pension sweeteners caused only 44% of the increased payments since 2001.

The bigger factor - 48% of the increase - was the plunge on Wall Street that took down the value of the pension funds, forcing taxpayers to make up the difference.

Budget insiders have known as much, but Bloomberg hasn't spent time talking about it. Now that an official report from the controller's office nails it down, Liu and his rivals will have the numbers to back up their arguments.

"If the mayor thinks otherwise, then back up the rhetoric with something of substance," Liu said.

At the same time, they're blaming pensioners for their pensions, Bloomberg and Cuomo have blocked the idea of balancing the budget by taxing the rich, saying they will just move someplace with a lighter burden.

It's a balancing act. Few New Yorkers will defend the firefighters who draw disability pensions while running marathons, or the lousy teachers who coast through their classes.

But as the battle over public-sector unions in Wisconsin shows, demonizing teachers and cops and janitors and firefighters can backfire.

"It could go either way," said Bradley Tusk, who managed Bloomberg's campaign in 2009 and is watching the field closely for 2013. "A lot of it depends on economic conditions."

Arzt says the candidate who plays it right can land in the sweet spot of public opinion - and perhaps in City Hall.

"The baby boomers are facing retirement, and that's a large group of voters that don't care for uncertainty in the future," he said. "They could look at city workers and say, 'I know how that feels.' People feel more hostile toward the banks than they do toward the public unions."

Anthony Weiner is going to be the next mayor. Mayor Weiner. Get used to saying that without laughing.

Eliminating pensions and then turning Medicare into a coupon program is a GREAT idea. I can't think of a better way to kill off old people and save Social Security. The Democrats are criticizing Paul Ryan for ignoring Social Security. HELLO, he has a plan to save SOcial Security. Why do you think he wants to kill Medicare?

According to the Crain's article, increasing pension costs is a GOOD idea since it will resuly in tax cuts! It's true:

"I guess Assemblyman Abbate hasn't heard that soaring pension costs could force billions of tax cuts and spending reductions on education, health care and other government programs?"

"Assume that any finance department official who contracted HIV did so as part of their job, granting extra benefits."

wtf..

Right - shame on wall street for not making enough money so they can pay an adequate amount of taxes so the public workers can just collect bloated salary, benefits and pensions off of wall streets boom.

Nothing at all to do with the fact that the union bosses knew that it was boom times due to wall street and a high flying economy so they negotiated unsustainable salary and packages for their union members and the policticians let them on the assumption that the boom would last forever instead of saving for a rainy day.

What a dumb report by Liu

thx for clarifying what blankfein meant when he said goldman does "the work of god"

any idiot knows wall street is all about altruism

our economic troubles are clearly the fault of unions, schoolteachers, tort lawyers, regulators....

Hmmm... John Liu... he was the WFP candidate... which would be... THE UNIONS!

surprise, surprise!

btw, even if he's right.... that unions are "only" 48% of the biggest problem we face, then is that supposed to justify not dealing with that issue?

Not to mention, Liu's analyis is for a short period.

THe problem is the long term. The 44/48% are just wrong in that case.... the ongoing cost increases will come from the sweeteners.

our economic troubles are clearly the fault of unions, schoolteachers, tort lawyers, regulators....

No our economic troubles are the fault of congress and the govt with their stupid policies....but it was the union leaders asking for unsustainable boom time salary and benefits which they expect to continue forever and for the idiotic policitians who gave it to them instead of saving for a rainy day or downturn

I have an issue with the lofty return assumptions used by many public (and private) pensions when determining their funding needs. It makes perfect sense for beneficiaries to use Madoff type returns during negotiations to show how little funding is needed to provide these great payouts. Now, when those assumptions prove to be too aggressive, they blame Wall Street for failing to hit the "promised" return. The politicians negotiating on behalf of the taxpayers are too dumb to figure this out.

You guys are all kidding, right?

Teachers are getting laid off. Unions are taking a killing. Benefit packages are being downgraded with each new bunch of hires.

> Teachers are getting laid off. Unions are taking a killing. Benefit packages are being downgraded with each
> new bunch of hires.

And given its the new folks affected, this will begin to matter... in 30 years.

Not saying we don't need that too, but that's not the hole we're in now.

> Now, when those assumptions prove to be too aggressive, they blame Wall Street for failing to hit
> the "promised" return

BINGO.

The assumptions came from the same politicians throwing around the blame they deserve for themselves.