Peter Feng, a spokesman for AFSCME in California, read last Thursday's State Worker column, "New proposal to cut pensions wouldn't spare current employees," and then e-mailed us with his reaction.
We're posting his unedited e-mail here with his permission:
Dear Mr. Ortiz:
Your January 20th column about eliminating retirement benefits for civil servants is misleading. Pension funds were almost fully funded until the recent market crash, which decimated public and private retirement funds and destroyed millions of jobs.
That means that Wall Street, not Main Street, is responsible for our budget deficits at the federal, state, and local level, so it's Wall Street, not Main Street, that should bear the cost of cleaning up this economic mess, especially since our tax dollars were used to bail out all those banks that brought on the Great Recession.'
You did get one thing right, though. Your example of Myra, who pays for her pension out of her weekly pay check, and who will receive only about $2,100 per month in retirement after 28 years of state service is not a lot to live on in California!
More than 80% of what Myra will retire on has been paid for by her earnings and investment income; she and her employer each chip in half of the rest of the cost. Hardworking teachers, nurses, school bus drivers are not the problem.
Furthermore, the Center on Budget and Policy Priorities released a recent report saying that "States have adequate tools and means to meet their obligations."
Even bankruptcy lawyers like James E. Spiotto of Chapman & Cutler in Chicago believe that bankruptcy is a bad option for states, because investors holding general obligation bonds would not be paid back under Chapter 9 bankruptcy rules.
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