Friday, April 08, 2005

Arnold Backs Down on Pension Initiative

The Sacramento Union reports that Governor Arnold Schwarzenegger if backing away from holding an initiative on privatizing state pensions. The other three initiatives remain. Link.
By delaying his proposed ballot initiative to privatize much of the state’s public pension system, Gov. Arnold Schwarzenegger may have made the first move toward defusing a divisive and expensive special election campaign this fall, elected officials and political observers said.

Schwarzenegger, dogged by growing public protests that have eroded his support in the polls, “has taken a major step back from the brink,” Darry Sragow, a Democratic consultant who helped Schwarzenegger win passage last year of Propositions 57 and 58, said Thursday. He added Schwarzenegger could be returning to the bipartisan “style and process of governing that we saw from him during his first year in office.” (...)

Schwarzenegger cited “misconceptions” Thursday by public safety workers that his pension measure would strip them of death and disability benefits as he withdrew the initiative. He offered to work with critics to develop a new pension plan that would protect workers and save taxpayers money.

Schwarzenegger said dumping the pension initiative wouldn’t affect his plans to push three other initiatives to the fall ballot. Those measures would limit teacher tenure, limit government spending and give control over drawing legislative districts to retired judges.

I would suggest a different reason than bipartisanship. Sometimes it helps to lump many things together and sometimes it hurts. The conventional wisdom is that cutting a benefit to a special interest is near impossible, because they are each hurt enough to organize politically and spend a good deal of money to stop it, while the broad public sees only small savings each. However, when President Reagan wanted to cut special interest deductions and tax credits along with tax rate cuts, he lumped enough of them together that the rate cuts could be big enough for the general public to feel it and fight for it.

Here, I believe, the lumping together of the four initiatives could hurt getting any of them passed. The pension plan would bring out every one of California's overstaffed state employees, who would vote against all four of the initiatives as long as they were out at the polls, just to spite the governor. With the pension initiative gone, we may see a more representative sampling of the voting public showing up for the special election, which would mean a good chance to get the other three passed.

Pension reform is absolutely vital for California, which could one day find itself in General Motors' situation if it does nothing. However, that fight may do better another day, when it will not drag down other needed reforms.


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