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"The battle over public sector pension plans has become a proxy for the most acrimonious debate on the financial health of state and local governments and the wages and benefits paid to their employees."
Here is my most recent article on the battle over pension numbers:
The battle over government pensions - American City & County article.
Dusk was already falling so Cathy and I were ready to leave the poolside reception at the Vice President's residence celebrating Rosh Hashanah when I took one more look at the small house at the other end of the pool. I had been admiring the small structure even as my wife and I were chatting with Vice President Joe Biden and about 130 Jewish leaders on the Tuesday before the holiday.
"Let's go down and take a close look," I said and we walked to the other end of the pool. "It looks really nice." The lights in the small structure were on, twinkling in the beautiful September air.
We walked close but kept a respectful distance, just poking our noses close enough to get a better look.
"It's our pool house," said a voice from a few feet away, where a small group of women were chatting. "Want to look inside?"
Jill Biden, the Vice President's wife, walked over and opened the door. "It's a very special place," said the Second Lady. "Tipper Gore built it so her mother would have a place to stay."
Jill showed us the small kitchen, the bathroom and the couch, which folds out for guests. "I love to come down here," she said.
"Nice place to get away?" I suggested.
"Sure is," she said, with a sigh. "Sometimes Joe and I just come down in the morning with our coffee and sit and relax for a few minutes."
She pointed out that she had had the main room repainted soft blue in keeping with the water theme. We chatted a little about about a few other features and she smiled broadly as we turned to leave.
"Thank you so much," we said, bidding her goodbye.
It was a great ending to a wonderful evening.
We had been invited to the reception a couple of weeks earlier and responded immediately. We arrived a few minutes early on Sept. 7 and parked on the long driveway after our car was inspected by a bomb-sniffing dog and our names were checked on the list.
Then we walked in, had hor d'oeuvres (dietary laws observed) and wine and soft drinks. Vice President Biden spoke for a few minutes about the need for peace in the new year, recited a very nice holiday poem and then announced that he and Jill planned to stay as long as guests were willing.
We chatted with some nice people from Delaware (there were a lot of nice people from Delaware) and some others who were from the Washington area. The Vice President was game. One couple called one of their children and asked Biden to speak to him. The Vice President obliged. Then they called their other son. Again, the Vice President chatted over the phone.
"No more children?" I asked.
"No, that's it," the mother said.
We also talked a little politics. The Vice President told a small group of us about his faith in the good nature of people. He told a story about how Mike Mansfield, then the Majority Leader of the Senate at the time Biden first arrived, advised him, "You can always question a man's judgment, but don't question his motives." Biden said he thinks the American people will ultimately get the politics right, though he admitted, "Some of the things that the Republicans are saying today are terrible."
We had our picture taken with the Vice President, as did most of the other people there. He kissed his friends, shook hands with others, and had a nice word for everyone.
Although the event was supposed to last 90 minutes, the crowd only began to thin out after about two hours. So we started to head out. But that pool house caught my eye.
So, off I go.
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After being checked off no fewer than four times on the list of the invitees (yes, the Salahis live), I enter the large auditorium and take a seat pretty close to the stage. It's pretty evident that many of the 600 seats are filled with congressional and White House staffers who worked on the health care bill. Everyone is very excited.
It turns out that I'm not the only one who was a little confused about the nature of the event. A nice lady from North Carolina, a state senator, and her friend, another state senator, also thought they were coming to the real thing. "I canceled all of my appointments and paid $600 for a plane ticket," she says glumly, looking at the huge monitor where we were going to watch the signing. "Don't get me wrong, but my email says attend the signing." She shows me the email. "Where did you come from?" I told her I came from Bethesda. It didn't make her any happier.
"Look," I say. "There's Al Sharpton." I jump up to grab a photo. "Here comes Eric Holder." I had read an article about Holder in the Wall Street Journal on the Metro on the way in. Some civil liberties type had compared him to Alberto Gonzales. Alberto Gonzales!! I figure the Attorney General could use some support. I go up and shake his hand and say that I think he's doing a great job. He smiles and seems genuinely pleased. "Thanks very much," he says. I'm about to say he's better than Alberto, but decide the better of it. Anyway, Peter Orszag, the budget director, is coming in, and I get in position to snap another photo.
The place is getting really crowded and it's about time for the signing, so I go back to my seat. "Are you sure Obama is coming here?" my state senator friend asks me. "I'll be really upset if I flew here to watch this on a monitor." I reach into my pocket and take out my email invitation. It clearly says he's coming to the rally. She's slightly mollified.
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The place gets very quiet and everyone turns to the monitors. First, the vice president speaks and speaks some more and speaks some more and finally introduces the president. The place roars, so I don't hear the "Big F---ing Deal" comment. Obama speaks and the auditorium is roaring. Then he starts signing and signing and signing, but no pen for me.
The lights come on and everyone is alive with excitement, but nothing to do but wait. Hilda Solis, the labor secretary, comes out and says she's going to fire up the crowd. Sorry, her speech is a snoozer. Even, "Si, se puede," falls flat. The labor secretary needs more work on her speechifying. Tom Vilsack, the agriculture secretary, comes out and he's much better. Everyone is getting excited. "Yes, we did," he shouts. Everyone roars.
Finally, the luminaries who had attended the East Room ceremony start entering. It's the mother lode. Kathleen Sebelius, Henry Waxman, Charlie Rangel (feel sorry for him; he seems slightly out of sync), Chris Dodd, Tom Harkin. Snap, snap, snap.
"Who's that sitting next to Valerie Jarrett?" my friend asks. She seems to be getting into the scene.
Finally, Vickie Kennedy and some others come on stage, including a cute kid. Obama and Biden come out and the place erupts. "Yes, we did," people shout and jump from their seats. Biden gives another introduction, and seems more circumspect in his comments, on and off mike. Obama comes to the microphone and the place is roaring. "Yes, we did," people are shouting and rhythmically clapping. It's wild.
Obama gives another great speech. "They say Armageddon is coming," he says, and everyone laughs. "Well in a couple of months, look up. We'll see."
He looks over at little Marcelas Wallace, the 11-year-old whose mother died without health insurance and then began a crusade for health care in her memory. "You're looking real sharp," the president says, noting that his tie and the boy's are the same. I'm thinking, what was I doing when I was 11. What have I done with my life?
Back to the speech. The President kicks into his close. Everybody leaps up. The place is rocking. It's electric. Even my friend is up on her feet. "Please give me a copy of that picture of all of them raising their hands over their heads," she says excitedly.
"I didn't get it," I said sheepishly."But I got a nice picture of Marcelas," I say hopefully. She doesn't seem too interested.
Obama starts down the rope line and I try to make it up up front to shake hands with him. "Yes, I can," I say to my friend as I try to wend my way to the front. But the president turns to leave before he gets to my spot. I'm disappointed but not too disappointed. Shaken his hand before. It's just part of the game.
I turn to take some more photos. Marcelas is right in front of me so I take another shot. Quite a kid.
The place begins to clear out quickly and I go back to grab my coat. OK, now what do I say to everyone I told I was going to the actual signing? I'm thinking, maybe I can fake it. No one will ever really know.
Nah, this wasn't bad at all.
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State and local governments have gotten themselves into a fix by promising too much to their employees in their retirement plans and then not producing enough through investment returns to sustain the plans. Some estimate that these defined benefit plans have accumulated over $1 trillion in liabilities. Others estimate that the true liability is three or four times as large.
In my most recent article "Hatching New Ideas" in American City & County Magazine, I look at a number of government plans that have sought innovative solutions to this problem, mostly through incorporating defined contribution plan elements into their retirement systems. The bottom line is that the retirement plans share the risk of investment with their employees. Most governments seem happy with the results. Employees are less enthusiastic.
How governments got into this fix is emblematic of the problems that beset much of our public policy. Legislators are happy to trade wage improvements today for far-off retirement paydays. Unions have garnered some unbelievable benefits for their employees, including some who retire on a higher pension than they made while they were working.
Of course, the reckoning is not that far off. And with the economic crunch that soured investment performance, the inevitable is approaching faster than expected. Look for governments being forced to hike the amount of money they contribute to the plans in order to keep them solvent. Guess where that money will come from.
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