05/27/2011

AFT Public Employee Leaders Discuss Budget Pressures

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Budgets and benefits took center stage at the AFT Public Employees program and policy council meeting May 19-20 in Washington, D.C.

While the standoff between congressional Democrats and Republicans over spending cuts and tax reform is well-documented in the media, AFT lobbyist Bill Cunningham said that one less-publicized threat is enactment of a budget enforcement process, which would automatically trigger if Congress doesn't meet its deficit reduction goals. Such a procedure, he told the council members, would allow elected officials to avoid taking responsibility for unpopular program cuts.

In related budget news, the AFT is lobbying against "global caps," such as those included in the Commitment to American Prosperity (CAP) Act, introduced by U.S. Sens. Claire McCaskill (D-Mo.) and Bob Corker (R-Tenn.), which aims to cut spending by more than $7 trillion over 10 years. The McCaskill-Corker proposal, Cunningham said, would limit federal spending to 20.6 percent of gross domestic product by 2023. (Currently, federal spending is 24.7 percent of GDP.) If Congress fails to meet the annual cap, across-the-board cuts throughout government would be made. Cunningham says the McCaskill-Corker proposal would necessitate benefit cuts of 19 percent in Social Security, Medicare and Medicaid by 2021.

State and local government employee retirement plans also are on the AFT's congressional radar. U.S. Rep. Devin Nunes (R-Calif.) has proposed the Public Employee Pension Transparency Act. The legislation would require state and local government retirement plans to report their funding using very conservative estimates of future income, which would result in misleading reports of inadequate funding levels, Cunningham explained. The legislation would further tax the debt issued by state and local governments if they fail to report their pension funding to the U.S. Treasury Department. "The purpose of this bill is to sow confusion about the adequacy of funding and strengthen the attack on state and local plans," he said.

AFT chief of staff Al Davidoff and staff pension expert John Abraham reviewed the AFT's plan to strengthen and reform pensions. "The genesis of the work done was based upon the push made by this council," Abraham said, noting that the public employees PPC first zeroed in on the attacks on public employee pensions nearly 10 years ago.

The blueprint is based on the union's belief that all Americans should have a decent and dignified retirement, and that tax dollars should be spent prudently and strategically to advance the nation's goals. The proposal calls for an end to abuses and excessive payouts, while also debunking widely repeated misperceptions of public employee pensions, which typically are modest and funded largely through employee contributions and investment growth. An innovative part of the AFT plan is using public pension funds for economic development such as infrastructure investment, said Davidoff.

In addition to promoting the public employee pension reforms outlined in the plan, the AFT will convene a summit of public employee organizations to discuss public employees and Social Security. About one-quarter of all state and local public workers are not covered by Social Security, so their pension benefit is their major source of retirement income. The AFT wants to explore the issues around what it would take to include all public employees in Social Security.

Representatives from the North Dakota Education Association sat in on the meeting. Recognizing that their members share many of the same issues, NDEA and the AFT's North Dakota Public Employees Association have been working together to represent the interests of public employees in the state Legislature. NDEA executive director Greg Burns said that the two unions represent members who provide the state's residents with critical services from cradle to grave.

The next AFT Public Employees PPC meeting will be held in conjunction with the National Conference of State Legislatures annual legislative summit, Aug. 8-11 in San Antonio. [Kathy Nicholson]

May 27, 2011