Today, the student newspaper at Brown University has a staff editorial on pension reform. The editorial calls, among other things, for cuts to future benefits earned by workers on state and local payrolls today:
Legislators must avoid the temptation to enact reforms that do not immediately set about closing the unfunded liability. Josh Barro of the Manhattan Institute notes, for example, that many states rely on cuts to future workers' benefits to alleviate pension troubles, delaying savings for "years or decades." A better approach, commonly taken in the private sector, is to apply changes to the future benefits of all workers.
The Brown Daily Herald, of course, is not exactly a bastion of conservatism. That the paper is endorsing a bold approach to pension reform is a testament to a few things. First, the underfunding of Rhode Island's pension system is truly dire, and it is hard to deny the need for painful changes. Second, Rhode Island Treasurer Gina Raimondo (D) has been a skilled communicator of the need for pension reform, and has managed to make the case for cuts while avoiding excessive acrimony with public employee groups.
But third, liberals nationally understand more and more how runaway pension costs are interfering with the legitimate priorities of government. As the editorial also notes:
The pension problem is so large that it consumes resources we could be using to bolster Rhode Island's anemic economy. General Treasurer Gina Raimondo released a report in June showing that taxpayers' "contribution to state retirement expenses has doubled in the last seven years" and is expected to double again by 2013. At that point, 16 cents of each taxpayer dollar will go toward the pension fund. Raimondo further notes, "In recent years, state aid to cities and towns, which is used mostly for K-12 education, has decreased annually by 8 percent, and state aid for higher education has dropped by 5 percent each year" as lawmakers try to support the pension system.
These concerns are why more and more liberal elected officials, especially at the local level, are speaking truth to power--i.e., to public employee unions--about the need for cuts to pension benefits.
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