Opinion: Christie, Sweeney Remain Worlds Apart on Pensions, Health Benefits

Carl Golden | July 29, 2014 | Opinion
Can governor and Senate president reconcile their separate visions and achieve meaningful reform?

Carl Golden
When Gov. Chris Christie unveils his proposal to dramatically alter the public employee pension and health benefits programs sometime next month, the air around the Legislature will be filled with words and phrases like “compromise,” “bipartisanship,” and “reaching common ground.”

Given the rhetoric from the competing interests on the issue so far, it might be easier finding Sasquatch than finding common ground.

The governor has insisted that the greatest impact of any systemic changes to the system fall on its membership, either through increased employee contributions or a reduction in benefits. He has just as consistently ruled out any tax increases to make up for the shortfall in the state’s contribution.

The opposition, led by Senate President Steve Sweeney (D-Gloucester), has been equally adamant that if the state would meet its obligation to fund the system in accordance with the 2011 reform law, benefits would be protected and solvency achieved over the next decade.

Public employees have done their share, Sweeney insists, and only three years after they were required to contribute more to the system, should not be called upon for further sacrifice.

He makes it a point to remind all within earshot that the increased employee contributions were agreed to by the Legislature on the condition that the state adhere to its schedule of increased payments. In other words, both employer and employee would do their part to rescue a benefits system headed for insolvency.

Christie and Sweeney are each locked into seemingly intractable positions. And the political considerations and potential futures of both depend in large measure on their maintaining those positions.

The governor cannot deviate from his anti-tax stance if he does, indeed, decide to move decisively toward fulfilling a national ambition and achieve top-tier status as a candidate for the Republican presidential nomination in 2016.

As he moves around the country in his role as chairman of the Republican Governors Association, he reminds audiences that, in his nearly five years in office, he’s vetoed
Democratic proposals to impose a surcharge on income taxes for the wealthy and has pledged to do so again.

A change of heart at this point — no matter the rationale — would do incalculable damage to his image.

At the same time, Sweeney must stand firmly with organized labor and public employee unions against any administration recommendation to extract greater concessions from them.

Many unionized workers are still smarting from the Senate president’s aligning himself with Christie to require increased pension contributions. A sign from him that he’s open to a similar alliance now would be devastating to any hopes he holds of becoming the party’s gubernatorial nominee in 2017.

The only sliver of hope to resolve their differences may be found in shifting from the current defined-benefit pension plan to one similar to a 401(k), an idea Sweeney supported three years ago but dropped from the final legislation under union pressure. Revisiting it could be dangerous for him, however, bringing up memories of his deal-making with the governor and raising questions of trustworthiness. Nerves are still raw from that episode.

By elevating the issue to such prominence, it’s almost certain that Christie will propose a more far-reaching and in-depth program than merely shifting the manner in which the program is administered. Moreover, he’s pledged to hold retirees harmless, maintain their current level of benefits — thereby exerting even greater pressure on active members of the system.

As has become his custom, Christie has taken to the road on behalf of his pension-reform efforts, telling his town hall audiences that the cost of the benefits system is driving the state toward bankruptcy. He invokes the image of Detroit and the bleak future it faces while warning that without dramatic cost containment, a similar fate will befall New Jersey.

He engages in his familiar beat down of public employees, blaming the escalating price of their benefits for higher property taxes and preventing the state from greater investments in all manner of other endeavors like aid to local school districts, hospitals, and higher education.

In an administration that seems enchanted by sloganeering, the governor’s latest tour has been dubbed the “No Pain, No Gain” show, signaling that the solution to the state’s fiscal distress will involve considerable pain and that he’s just the person to take on the special interests and achieve gains on every taxpayer’s behalf.

While the slogan seems more suitable splashed across a banner in the weight room of an NFL team, it is in keeping with promoting the image of boldness and courage projected by its predecessors — the New Jersey Comeback, Stronger than the Storm, and so on.

Sweeney has attempted to take his case directly to the people as well, accusing the governor of reneging on his solemn promise to fund the pension system, protecting millionaires, and adding to the burden carried by middle-class and low-income workers.

By casting public employees as the villains standing in the way of reform, Christie has taken a calculated risk that taxpayers and the larger public share his view that government workers enjoy higher salaries, more generous benefits, greater job security, and more comfortable work environments than their counterparts in the private sector.

Sweeney’s task is to convince taxpayers that the public workforce differs little from the private one, that they work hard, contribute significantly to their benefits, and worry about the same things others do — mortgages, college tuition, car payments, and personal economic security.

He must argue that the governor’s continued vilification of them and using them as scapegoats is grossly unfair and is not justified by real-life experience.

Sweeney is relying to some extent on the public becoming weary of the governor’s persistent placing blame on government workers while shifting attention away from the administration’s failure to better manage its own fiscal affairs.

Whether he’ll make any significant headway with this argument or whether Christie’s assessment that antipathy toward public employees has not weakened remains to be seen.

The perilous condition of the pension system is symptomatic of the state’s continual budget distress, the last-minute scrambling to fill shortfalls resulting from years of unrealistic revenue estimates, an economic recovery and job creation rate best described as anemic, and the absence of any long-term strategy to restore the state to sound, stable financial footing.

Given Christie’s timetable, the issue will in all likelihood preoccupy the Legislature in its fall session and into 2015, an election year for the Assembly. The pieces are in place for months of contentious, politically driven debate.

Christie and Sweeney — while far apart on the issue — hold the key to genuine, fair and lasting reform of the pension system.