Tag Archives: Public Sector

News

Veronique de Rugy debunks myths about public sector pension liabilities

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From Reason magazine. (H/T Hyscience)

Bullet point summary:

Myth 1: Unfunded state pensions do not represent an immediate threat and are therefore not in crisis.
Fact 1: In the best case scenario, some state pension funds will run out as soon as 2017. And the longer the states wait to fully fund their pensions, the more drastic the financial consequences will be.

Myth 2: State debt accurately reflects state liabilities. And state default is not a concern because the federal government will bail the states out before they reach that point.
Fact 2: Many government pension liabilities are kept off the books, so most states and cities underestimate their actual debt.

Myth 3: State and local workers are not overpaid. And even if they are, changing their compensation won’t make a difference.
Fact 3: While this is a complex issue, the total compensation package for state workers does tend to exceed that of their private-sector counterparts.

Myth 4: The financial crisis, which caused a depreciation of pension assets, is the real culprit behind pension underfunding.
Fact 4: While the recession dealt a severe blow to state pensions, the problem of pension underfunding dates back to the early 2000s. Many states had already failed to cover the cost of promised benefits even before they felt the full weight of the Great Recession.

And conclusion:

Here’s the bottom line: We can argue endlessly over when the pension plans will run out of cash, or what the true value of the unfunded liabilities is. We can even debate what the true meaning of being broke. But there is one issue where there is no room for debate. Once the pension plans run out of money, the payments will have to come out of general funds, meaning out of the pockets of taxpayers. If the states want to avoid this, they must push through reforms as soon as possible. A good first step would be to switch to accounting methods that show the true market value of their liabilities. Once those methods are in place, lawmakers should consider moving away from defined benefit pensions.

What states like Wisconsin and Ohio are doing is completely necessary. This is a real crisis, and we need to act now to make sure that taxpayers are not squeezed when the money runs out.

Commentary

How much influence do labor unions have in the Democrat party?

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I found this amazing Milwaukee Journel-Sentinel article on Marathon Pundit’s blog. It explains where the political contributions of the biggest unions go. Let’s take a look at a few of the unions.

Excerpt:

• National Education Association. Membership: 3.2 million; assets: $216 million. The NEA, representing most of the nation’s teachers, has 31 headquarters officers and employees who earn more than $200,000 in pay and benefits. The president, Dennis Van Roekel, received $397,721 in salary and benefits. Of the $3.7 million NEA spent on political activities in the last election cycle, 98% went to Democratic candidates. The NEA has 98,000 members in Wisconsin.

• Service Employees International Union. Membership: 1.8 million; assets: $187 million. The SEIU, whose membership has increased in recent years, has been organizing hospital, home care and nursing home workers, along with local and state government employees, janitors and security officers. The union has nine headquarters officers and employees who earn more than $200,000. The former president, Andy Stern, was paid $306,388 in salary and benefits from the union in 2009. Stern resigned in 2010 and was replaced by Mary Kay Henry, formerly the executive vice president. Over the past two years, SEIU gave almost $2 million to Democratic candidates and $8,500 to Republicans. It has 18,000 members in Wisconsin.

• United Food & Commercial Workers. Membership: 1.3 million; assets: $157 million. The UFCW, whose members work in meatpacking, food processing and retail grocery stores, has 17 headquarters officers and employees who earn more than $200,000. The president, Joseph T. Hansen, received $360,737 in compensation in 2009. Of the $1.9 million the union donated to political candidates over the past two years, 99% of it went to Democrats.

• International Brotherhood of Teamsters: Membership: 1.3 million; assets: $175 million. The Teamsters, whose origins date to the horse- and mule-team drivers of the late 1800s, represent truck drivers and a wide array of blue-collar and government workers. Eight headquarters officers and employees received more than $200,000 in 2009. The president, James P. Hoffa, was compensated $364,869. Over the past two years, the Teamsters have donated $2.3 million to Democratic candidates and $46,500 to Republicans.

• American Federation of State, County & Municipal Employees. Membership: 1.5 million; assets: $78 million. AFSCME, one of the fastest growing unions in the United States, was founded in Wisconsin almost 80 years ago. At union headquarters in Washington, 10 officers and employees receive more than $200,000 a year. McEntee was paid $479,328 in salary and benefits in 2009. Over the past two years, AFSCME has donated $2.3 million to Democratic candidates and $78,500 to Republicans.

Emphasis is from Marathon Pundit. The Democrat party is basically owned lock, stock and barrel by the unions.

News

Stephen Harper’s Conservative Party cuts federal spending by 6.2%

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Prime Minister Stephen Harper
Prime Minister Stephen Harper

More news from up north. (H/T Ben)

Excerpt:

Federal government expenditures are set to fall next fiscal year by $16.5-billion, or 6.2%, with big cuts to regional development and environment programs, according to documents tabled Tuesday.

That would leave total expenditures for the 2011-12 year at $250-billion, with the bulk taken up by transfer payments to individuals and governments, and operating costs. Just over $30-billion of that expense is attributed to refinancing Canada’s debt.

The figures, contained in spending estimates provided by the Treasury Board, sees budget increases for departments entrusted with security and law enforcement – such as a 21% boost to jails — but cuts of roughly 20% to Environment Canada, Natural Resources Canada and Agriculture and Agri-Food Canada.

Government is supposed to be concerned with security and law enforcement, not with environmentalist wastefulness.

Here’s Paul Ryan. He would like to cut our budget by 6.2% – and maybe even more.

If Canada is cutting their government waste, then why can’t we?

There are a lot of programs that we could be cutting.

Excerpt:

The federal government could save billions in taxpayer dollars annually by consolidating duplicative government programs, according to a new report.

The newly-released report from the Government Accountability Office “makes us all look like jackasses,” Sen. Tom Coburn (R-Okla.) told reporters Monday night.

The conservative senator said the report — which identifies redundancies in more than 546 individual programs — reveals why the United States is $14 trillion in debt.

“Anybody who says we don’t look like fools up here hasn’t read the report,” he said.

[…]The GAO reviewed 34 areas (among them agriculture, defense and social services) where agencies, offices or initiatives have similar or overlapping objectives. The report also looked at 47 additional cost-saving opportunities related to more general government efficiency. For instance, the report said, “Improved corrosion prevention and control practices could help [the Defense Department] avoid billions in unnecessary costs over time.”

Addressing duplicative efforts on even a single issue could save billions, the report found. For instance, the GAO says the government could save up to $5.7 billion annually by addressing potentially duplicative policies designed to boost domestic ethanol production. Additionally, the Defense Department could save $460 million annually by making broader changes to the governance of its military health care system.

The report finds that there are 15 agencies involved in food safety, 80 programs involved in economic development and more than 100 involved in surface transportation. There are 10 agencies and 82 programs involved in teacher quality, and more than 20 agencies and about 56 programs involved in financial literacy efforts. There are about 2,300 investments across the Defense Department to modernize its business operations.

House Majority Leader Eric Cantor (R-Va.) said today that in order to foster long term economic growth, “we’re going to deal with the pressing issues of regulatory waste in our agencies, as well as long term issues facing our country with entitlement programs.”

This is why we have to stop giving private sector money to government. They don’t earn any money by making things or helping people – they don’t sell anything useful. They just steal money from the productive workers and businesses and then they waste it and run up trillion dollar deficits. This kind of corruption, fraud and waste would not survive in small businesses, and probably not even in big businesses. Business have to be efficient or they go bankrupt. They have to perform or their competitors will have them for lunch. The consumer is king in the private sector.

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