Ron Lieber had a recent New York Times column that continues to avoid talking about what no one wants to talk about. According to Lieber “the big picture question…remains one that is more moral than economic. Decades ago, we made promises to government workers. Now, depending on your view, those promises have turned out to be too generous…Whatever your view, we now face a choice: Should all taxpayers (including the retired workers themselves) pay a lot more in taxes and accept large cuts in government services to pay for the promises to government employees? Or should we break the promises (by a little — or more than a little) because they have turned out to cost too much?”
The unsaid is this. In many cases, public employees are not due the pensions that were promised “decades ago” when they were hired. They are due pensions that were retroactively enhanced in deals with politicians in exchange for political support, with costs to others that were deferred, hidden, and fraudulently misrepresented. And taxpayers often didn’t fully fund the promises workers were made to begin with. The beneficiaries are past taxpayers, today’s seniors, who also left other debts and who now enjoy special tax breaks as retirees.
Lieber isn’t alone in framing the issue the way he does. No one is talking about the public employees being responsible for the retroactive pension deals, and older taxpayers being responsible for the remainder of the underfunding. There are those who want to reduce the pension benefits of public employees to less than they were originally promised. And those who want even more pension enhancements, followed by the collapse of public services.
It seems as if the greatest cuts in public employee pensions are taking place in parts of the country where the public employees have the lowest share of the blame. Meanwhile, the highest taxes and ongoing public service cuts may be found in New York City, where the state legislature proposes additional retroactive pension increases — and deferrals of costs from the past to the future — every single year.
The United States is being pillaged by Generation Greed. New York State in particular is government of the seniors, by the seniors, for the seniors at the expense of the future and everyone else.
Perhaps, however, younger generations are no less greedy, but simply less powerful. And there won’t be a shift from their victimization to fairness, but rather a shift from their victimization by those who came before to the victimization of those who came before.
How would one describe a situation where a unionized public employee who was promised a pension and health insurance at age 62 after 30 years of work ends up with far less? In New York City, I believe the word is karma. Expect the young to eventually head for places with actual public services at tax levels that are not the highest (unless you are a public employee with tax exempt retirement income). And feel no moral remorse at all.
But what the recent budget shows is New York has made its choice. All New Yorkers will receive cuts in public services, and higher taxes (since pensions were exempt from the property tax cap and there is no cap in New York City), to pay for the power and selfishness of the public employee unions and this generation of public employees. Except for the retired, who will continue to have much of their income exempt from tax.