ALEC loves Raimondo
The pro-big business
bill mill known as ALEC released a report this week that not only praises Gina
Raimondo and local legislators for what they did to retirees in 2011, but also
uses Raimondo’s Rhode Island model for why and how to downsize public sector pension
plans.
The new ALEC overview even uses Raimondo’s
emotionally compelling words as a visual graphic in its executive summary.
Furthermore, the 45-page report is also the same exact game plan she used to
sell the state on her plan.
“Legislators should move defined-benefit systems to properly designed alternatives, such as defined-contribution, cash balance, and hybrid plans,” suggests the summary. “They offer increased predictability for the employer and an increased likelihood for the employee that the money promised will actually be set aside.”
ALEC’s report is
called “Keeping the Promise” and Raimondo’s legislation was called the “Rhode
Island Retirement Security Act.” Both names imply that the effort is on behalf
of the employee, but both ALEC and Raimondo are known for championing a much
different demographic.
The crux of both is
that a defined contribution plan, which is more management-friendly, is more
sustainable than a defined benefit plan, which is more retiree-friendly. Rhode
Island switched from a defined benefit plan to a hybrid plan.
Using the same
pretense of being retiree-focused, the report also cites Central Falls fiscal
problems as an example of why pension cuts can be needed.
More than anyone else,
though, public retirees suffer from ill-funded plans. For example, in August
2011, the city of Central Falls, RI, filed for bankruptcy protection and went
into receivership. As a result, some retirees saw their monthly payments cut in
half.
It’s the second
reference to financially-struggling cities benefiting from pension cuts. The
first page of the executive summary says, “In the most extreme cases of fiscal
distress induced by poorly managed pensions, some cities have had to go to
court to seek bankruptcy protection and restructuring.”
National media briefly
concerned itself with this same topic last summer when Joe Nocera of the New
York Times wrote a column saying Woonsocket’s budget problems were more closely related to
conservative government-shrinking efforts than to pension obligations.
Josh Barro, a conservative columnist who then worked for Bloomberg, quickly
fired back that pensions are to blame.
This is at least the second ALEC report to laud Rhode Island for its
pension cuts. “Perhaps the biggest pension reform success last year
came from Rhode Island,” reads ALEC’s 2012 Rich State Poor State report.
Another local connection
to the two ALEC reports: Jonathan Williams, a contributor to the local ALEC-aligned
small government group the Center for Freedom and Prosperity, is
listed in the acknowledgements of this year’s report and was a co-author of the
previous report.
Something else worth
noting: Last year (when Raimondo was still known as a “pragmatic progressive”
rather than a “Wall Street Democrat”) only RI Future published a report on ALEC’s thoughts on Rhode
Island’s pension cuts.
This year, it was covered by at least two TV stations, one radio station and the Associated Press. At least three local reports used the word “praise” to describe what ALEC thinks of Rhode Island’s pension cuts. None of the reports call the changes to state’s pension system a “reform.”
This year, it was covered by at least two TV stations, one radio station and the Associated Press. At least three local reports used the word “praise” to describe what ALEC thinks of Rhode Island’s pension cuts. None of the reports call the changes to state’s pension system a “reform.”
Bob Plain is the editor/publisher of Rhode Island's
Future. Previously, he's worked as a reporter for several different news
organizations both in Rhode Island and across the country.