When can a State renege on a commitment?

    By Flavius on Fri, 02/18/2011 - 11:39pm |

    When it negotiates a government employee pension

    Among the media voices who discussed Wisconsin today - on Diane Rehm, on Brian Lehrer, on All-Things-Considered - the consensus was that Wisconsin Governor Walker had no choice but to gut public employee pensions and emasculate the unions because Wisconsin is in a desperate condition.
    Oh?

    NEW YORK -- Fitch Ratings assigns an 'AA' rating to $428.74 million in State of Wisconsin (the state) general obligation (GO) bonds of 2011, series A.

    The bonds are expected to sell competitively on Jan. 12, 2011. In addition, Fitch affirms the following ratings:

    --Approximately $5.3 billion in outstanding GO bonds at 'AA'.

    The Rating Outlook is Stable.


    And, Oh?

    Wisconsin-Governor- signed two other tax cut bills in January. One wipes out corporate and personal income taxes for companies that relocate to Wisconsin and would cost the state about $1 million. The other eliminated state income taxes on contributions to health savings accounts and will cost the state $49 million.

     Globalization has, as designed, forced US factory workers to compete with their developing country counterparts who will work for a bowl of rice. In a building with boarded-up exits in the fine old tradition of the Triangle Shirtwaist Company.

    Now competent working reporters proven to be able to unearth hidden abuses instead appear in these talkathons, sagely recycling Governor Walker's claim that given the dimensions of Wisconsin's  financial crisis (apparently not understood by Fitch) the obvious solution isn't to forego his rich assortment of tax cuts but to retroactively strip government workers of the pensions obtained in past negotiations in exchange for the concesssions which the then governors wanted.

    It's the ever popular back-to-the-future. In this case to the 19th century, where we'll be treated again to the anquished query, "Are there no work houses?"

    Comments

    Thank God.  I thought I was the only one asking this question.  Why isn't more attention being put on legally negotiated obligations that were mandated by law?

    Well, we're told, "it's an emergency, we're broke."  Well, then why did you a) negotiate a pension you couldn't afford, and/or b) cut taxes so much your state can't meet its fiscal responsibilities? 

    Heck, most of these guys loved the pensions enough to dip in and borrow from them to balance their budgets when needed, but now they feel they can  cry poverty and simply walk away because it's the easiest thing to do.  I don't get it.  Why isn't there more outrage at this?


    by MrSmith1 on Sat, 02/19/2011 - 12:17am

    Excellent point!  NY has had budget problems for quite a while now.  So far, though, our teachers, students, nurses, doctors and citizens have not felt the need to march on Albany.


    by LisB on Sat, 02/19/2011 - 1:17am

    Why, for that matter, aren't the governors like    Corzine and Whitman who simply did not put the money in the pension funds that the law prescribed going straight to jail, do not pass go....?


    by jollyroger on Sat, 02/19/2011 - 1:30am

    past negotiations

     

    Funny how the Repugnants snivel about the sanctity of contracts when some poor working stiff wants to walk away from an upside down mortgage deal...


    by jollyroger on Sat, 02/19/2011 - 1:33am

    Repugs are supposed to be champions of the 'Rule of Law' aren't they?   Except when they can wheedle their way out of it.


    by MrSmith1 on Sat, 02/19/2011 - 2:32am

    Back on 4 Feb, I put up a post titled...Where's the News. In it, I wrote the following:

    The Shock Doctrine, redirect the attention of the public to some other trivial issue away from what you're doing so when their attention is back and focused, the changes have already been approved and implemented and there's nothing they can do. I wonder what kind of mischief the GOper's were able to gum up because everyone's attention was distracted?

    With the abortion issue on the front burner in Congress, this made-for-FoxNews issue in Wisconsin that may spread to other hostile GOPer governed states and The Boner feeling his oats about shutting down the government I think I hit the nail on the head.

    Egypt was the distraction they needed.


    by Beetlejuice on Sat, 02/19/2011 - 7:03am

    I agree with all the above. Obviously. Now I'm going skiing. See ya.


    by Flavius on Sat, 02/19/2011 - 7:33am

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