Train of Fools

The circus train has left the station and the lead clown, our own Governor Kitzrobber, is sitting like Captain Kangaroo to lead the merry band of fools on another journey to rape and pillage the pensions of PERS retirees (and future retirees).  It wasn't bad enough that SB 822 put the kibosh on over half the cost-of-living increases for about half of PERS retirees, but the latest feast day for fools (September 30th, this year), will now go after the other half of the PERS retirees - the poor ones.  

During the entire discussion of SB 822, the objective was to protect the poorest retirees from any cuts, and subject those who weren't the very poorest to a progressively lower COLA as benefits rose.  Thus, for the nearly 40% of PERS retirees making less than $20,000 per year, they could continue to get the measly 2% COLA spelled out in statute.  Once the benefit exceeded $20,000, brackets at $20,000, $40,000, and $60,000 per year kicked in and progressively lowered the marginal COLA received on each dollar in excess of the last bracket.  So, for people earning between $20,000 and $40,000, the COLA would be 2% on the first $20,000 and 1.5% on the amount over $20,000 and less than $40,000.  Basically, a worker at the top of the second margin, earning $40,000 per year would receive a 1.75% COLA until the benefit exceeded $40,000.  With each bracket the marginal COLA declined so that the marginal bracket at $60,000 would drop to 0.25% on excesses above $60,000.

On the surface, the original cuts from SB 822 look pretty small, but the compound effects of the cuts become dramatically larger the greater the amount of time.  The cumulative losses to retirees become staggeringly large at about 20 years post-retrement, with inflation adjusted benefits being reduced by nearly half at one's most vulnerable point in life.

All of that was draconian, but the newest proposal shephered by the Bhutanese Cowboy would make SB 822 look positively generous.  No longer does he even  pretend to protect the poorest PERS retirees.  Now, he's just slavering for money, however he can get it.  The new proposal, to be voted on next Monday (Feast Day For Fools), simply takes the existing SB 822 proposal and cuts it essentially in half.  Now, there is no modicum of protection for the poorest (see next paragraph); the first $60,000 gets 1.25% COLA, period.  After $60,000, the marginal rate drops to 0.15%.  In viewing spreadsheets comparing the impact of SB 822 (described in the previous two paragraphs), and the new proposal, the 20 year inflation adjusted benefit has been reduced by nearly 70%, with the hardest hits accruing to the lowest paid members.  This is not only greedy; it is downright cruel.  It is money-grubbing at its worst, and SAIF-like as its best.  PERS members and PERS retirees have now been fully trotted out, skinned, skewered, and stuck on a spit to roast for every sin ever committed by public education in this state.  

To mollify the poorest, the head legislative clowns, chief among them, Peter Buckley have offered the possibility of an adjustment - roughly equivalent to a tiny one-time payment - as a sop to the poorest.  The bad news is that it will be really tiny; the worse news is that it won't increase the benefit base.  That's cynical and evil as far as I am concerned.

I've been a life-long Democrat and have donated thousands of dollars to support various legislators in their election and re-election campaign.  But now, that support no longer exists.  Thus far, every House Democrat and every Senate Democrat supported SB 822.  There are a couple of really easy, low-hanging fruits in that basket and I can promise them - Devlin, Kotek, Buckley - not a penny of support, but active support for any Democratic opponent regardless of philosophy.  I don't really care any more.  The incumbents disgust me.  They cynically took money from labor and then turned around and stabbed organized labor and all public employees in the back, without a moment's regret.  They have completely lost our trust in their ability to protect working class, labor, and middle class families.  As for the Governor, the leader of the clown brigade and architect of this "grand bargain", he's done as far as I'm concerned.  To be honest, and not the least hyperbolic, I'd sooner vote for Dennis Richardson than John Kitzhaber.  Why?  Because Richardson doesn't even try to hide his contempt for public employees.  He's so disgusting that he could be more easily neutralized than the country-bumpkin from Roseburg.  Dr. John needs to go back to fishing, hunting, and seeking spiritual awakening in Bhutan.

Once more I will say to the critics of PERS.  You've been lied to, you've been misled.  Little that you read about PERS stands up to any critical scrutiny.  PERS has been incredibly transparent, more so than many of us wish, and the result of that transparency has been for the shrill critics to cherry pick facts and figures that describe very few people I know (and I probably know more PERS members than the average PERS member or Legislator).  PERS members and retirees did absolutely nothing wrong.  We entered into agreements with our employers to perform certain tasks in exchange for salary, benefits, and the deferred compensation of the pension system we had no choice in.  The number of ways the system can be gamed are few and far between and very few people even have a clue how to do it; it also requires the complicity of the employer to get away with (think about that for a minute).  Most of the stories involving people with very high incomes are of people who (a) had high paying jobs, (b) worked for very long periods of time, and (c ) took advantage of the variable annuity program where they were willing to forgo a guaranteed rate of return in exchange for market rates for as much as 75% of their portfolio.  There's no gaming there.  Those people could just as easily lost their shirts.  That they were willing to risk their own money completely should be rewarded, not criticized.  As for the COLA, it has been a promissory part of the PERS contract (yes, contract) since 1973.  It isn't anything new.  The COLA has NEVER been guaranteed to be paid out annually at 2%.  That was the ceiling on the COLA.  Many of us started our retirements in the early aughts and received either no COLA or a minimal COLA.  That's because the cost-of-living increase in the years we retired was minimal.  The new way guarantees a minimal payment regardless of the cost-of-living increases or decreases.  It completely decouples the thing called a COLA in statute with the statutory meaning of the word COLA.  

Legislators who vote for this latest attempt to blame PERS members for problems of the public schools will pay a heavy price for that vote.  I predict that some 150,000 or more PERS members and retirees might decide to either sit on their hands in 2014 and let the chips fall where they may, or may actively support opposition candidates.  This is an ugly place for the Ds to be.  Just remember that we already know what to expect from the Rs, so having them would produce no surprises.  What surprises us is the Ds contempt for its natural constituency.  It begs labor for endorsements and, more importantly, cash.  Now that they've spit in the eye of organized labor, I expect that money will be a little harder to come by.  What's worse, I expect, is that after all of this, the court is likely to overturn the legislation concerning the "COLA".  And so, you will have expended all of your political capital and then some, only to be hoist on your own petards when the court gets through with you.  Think about this simple question:  when does a COLA cease to be a COLA, by definition?  And, then, "PERS shall not pay a benefit to which a COLA does not attach", Strunk, 2005.  Good bye, and good luck.  You deserve your own fate.