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Nov
2013
20

Sirota: Corporate Giveaways, Not Public Pensions, Cause Financial Stress and Need Reforming

David Sirota

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In an op-ed for USA Today, David Sirota gives credit to conservative activists, business groups, and politicians for their attempts to demonize public pensions.  But this well-coordinated attempt to sway public opinion, he writes, should not result in pensions being “reformed.”  For many state and local governments, wasteful spending and unnecessary giveaways to corporations are causing more financial uncertainty than pensions ever could.  

In debunking the right-wing rhetoric, Sirota notes that the approved agenda and talking points are in factually inaccurate:  

States do confront a $757 billion pension funding gap. But this gap was created mostly by losses associated with the 2008 Wall Street collapse, not by unsustainable benefits.Additionally, the shortfall is over 30 years, meaning it is comparatively tiny — just 3.8% of state and local spending, according to a study by Boston College. This has led McClatchy Newspapers to correctly conclude: “There’s simply no evidence that state pensions are the current burden to public finances that their critics claim.” The budget problems of state and local governments have more to do with wasteful corporate subsidies than pensions. While states face an annual $25 billion pension shortfall over 30 years, they give away $120 billion a year in unjustifiable handouts. That includes the $80 billion that The New York Times reports that are given away in direct subsidies, and an additional $40 billion in corporate tax loopholes.

Sirota argues that for many politicians, such as New Jersey governor and probable 2016 presidential candidate Chris Christie, demonizing public pensions is a way to deflect the focus of the conversation from the unnecessary corporate giveaways which go to the people fueling Republican campaigns:

In Christie’s case, he has berated public workers and cut their pensions — all while handing out more than $1.5 billion in corporate subsidies. Meanwhile, he and other pension-cutters fail to specify how America can maintain any retirement security for the middle class. To combat this, elected officials who care about the truth must spotlight the subsidy data showing what is really bankrupting states. They must also remind voters that pension cuts harm real people. Public-sector workers are not leeches. They are firefighters, police officers and teachers who negotiated agreements to defer some compensation until retirement. Reneging on retirement promises to them in order to help politicians protect wealthy corporations is immoral. Getting this message out is important — and can be a winning political strategy.

If Democrats wish to thwart Christie’s attempt to make public pensions a focal point of the 2016 Presidential race, they must begin by arguing against corporate giveaways in the 2014 midterm elections.  ”Getting this message out is important,” Sirota conclues, “and can be a winning political strategy.”

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