By: Mark Glennon*
Misleading media are a primary cause of Illinois’ fiscal crisis, we often say here, for the simple reason that democracy doesn’t work without fair, accurate reporting.
This past week we had two examples. Together, they provide a case study in how false narratives take root, as we see the world, so let’s take a close look.
The first was by Greg Hinz in Crain’s under the headline, “The surprising sound of pension partisans agreeing for once.”
“Left, center and right are singing a similar tune,” says the article, on a core idea for pension reform championed by the union-backed CTBA, the Center for Tax and Budget Accountability. They call it “reamortization,” which is really just putting more money into pensions sooner, flattening out the ever-increasing schedule of contributions taxpayers now face, and kicking the can by lowering the long-term funding target to just 70 percent. Governor-elect Pritzker has said he’s seriously considering that.
Most everybody seems to be on board with the CTBA’s plan – that’s the key impression the article gives.
Specifically, Hinz refers to a new book to be publicly released January 1 titled The New Chicago Way by Ed Bachrach and Austin Berg. Bachrach is founder of The Center for Pension Integrity and Berg writes for the Illinois Policy Institute. Both are intense critics of defined benefit pensions and both are right of center on fiscal matters. In other words, they’re generally in the same camp as us at Wirepoints – “flat-earthers,” Hinz calls us (which I’ll come back to).
“Is this about the same book I read?” That was my initial reaction to his article. The notion that Bachrach and Berg are even remotely on the same page as the CTBA and Pritzker is crazy. In fact, they don’t even agree on that single point about amortization schedule on which Hinz focused.
Yes, Hinz said they differ about how to fund pension payments, but they have profoundly different views on all the biggest issues. Bachrach and Berg would freeze defined benefit pension accruals entirely and amend the constitutional protection clause – both abhorrent to the CTBA. The 288 pages of their book brim with other harsh medicine they want delivered before putting more money into pensions. Only with those reforms will Chicagoans stick around and pay for those pension debts, they emphasize. In stark contrast, the CTBA and public unions want more money faster and no reforms.
Importantly, there is significant agreement emerging on a different topic. That’s to follow Arizona’s example and amend the state’s constitutional pension protection clause. It has now been endorsed by the Chicago Tribune, Rahm Emanuel, the Civic Federation, the Illinois Policy Institute, us and Crain’s own editorial board. Hinz ignored that emerging consensus, however.
Which brings us to the second article, Rich Miller’s on that subject of a constitutional amendment. Like his other weekly articles, it was widely syndicated around the state.
Miller lays out why an amendment simply isn’t in the cards. His reasons are mostly political. With a 3/5 vote of the General Assembly being required for an amendment and the public unions having the influence they do on Pritzker and the legislative supermajority, there’s little chance for amending the pension protection clause.
True enough, but why aren’t an amendment and other reforms politically feasible in Illinois? Partly because of articles just like Miller’s.
Politics becomes policy for political reporters. “To the carpenter, the whole world is wood,” as the saying goes. If it’s not politically feasible, move along. Nothing to discuss here, as many political reporters see the world. The headline on his story, at least in the Chicago Sun-Times, became “Arizona-style pension fix won’t work in Illinois.” Won’t happen morphed into won’t work. It’s self-fulfilling.
Politicians fall into it, too. If it won’t win you votes it must be a stupid idea – that’s what elected office does to their brains. It’s a version of the Stockholm Syndrome, as others have described what ails Illinoisans. That’s when hostages begin to trust and respect their captors. The establishment tells you how it will be, you accept that’s how it should be.
We’re sometimes criticized here for offering ideas that aren’t politically viable, but we know they often aren’t. Yet. We didn’t just fall off the truck. There’s a longer game that must be played.
The second problem with Miller’s article is harder to justify. It’s about another of his reasons why an amendment won’t happen. “It does not appear that a pension payment ‘doomsday’ is soon upon us,” he says. “Annual state pension payments will increase an average of $300 million a year over the next 10 years. That’s a lot of money, but it’s still fiscally manageable.”
Miller has to know that misses the point. It’s what Chicago and Illinois are not putting into their pensions that’s the problem, causing the unfunded liability to surge year after year. Miller’s own pension expert, who goes by RNUG on his site, often explains why annual contributions are billions of dollars short of even covering interest that effectively accrues on unfunded pension liabilities. And Miller entirely ignores healthcare benefits for public retirees, which alone add a stunning 50% to the taxpayer liability, and it’s entirely unfunded.
With articles like that, it’s no wonder so many Illinois voters think our fiscal crisis is nothing a little tax increase won’t solve.
Put the Hinz and Miller articles together. Ask yourself what would be the takeaway for the average reader. It’s that consensus is emerging on the CTBA-Pritzker approach to pensions, and that competing, right-of-center ideas won’t work and aren’t needed.
We say that’s a false narrative. You judge for yourselves.
Here’s how Hinz described us fiscal realists, as we like to call ourselves (though I’ll presume he was being facetious):
…flat-earthers, the folks who favor government bankruptcy and want to slash or, better yet, eliminate benefits and/or amend the state constitution to make government retirees just as cash-poor as those in the private sector who no longer can rely on a defined-benefit pension.
Every assertion in that is false, except I kinda like “flat-earther” label. It conjures an image of us saying Illinois is about to go over the edge, while others go ‘round and ‘round spinning their happy tales of an easy route to riches on a different continent. This time, there’s no easy route.
*Mark Glennon is founder of Wirepoints.