The Right's Attack on Public Pensions

Gov. Arnold Schwarzenegger says getting rid of public pension plans for California's state and local government workers is about helping to balance the budget. Peel back the budget wrapping on his plan, though, and you will find the governor's real agenda: the California prong of a national attack on the pension funds that have stood up for corporate reform and the interests of ordinary families and investors hurt by the recent wave of corporate scandal.

The governor has proposed privatizing government pension plans and replacing them with individual 401(k)-style private accounts. His proposal strikes at the power of public pension funds, which have used their financial clout to protect the retirement savings of 2 million Californians -- teachers, police officers and other public servants.

The governor says his proposal is necessary because pension costs are out of control. Pension costs are certainly worthy of public debate, but his plan requires running two pension systems: one for current workers, a second for new workers. That would cost California taxpayers billions more in years to come -- $5.9 billion in the first 10 years in the California State Teachers' Retirement System alone. Tellingly, even four of the governor's own six appointees to the teachers retirement fund oppose his proposal.

Why this proposal then? Because for the right-wing ideologues behind his plan, the issue is not saving money. It is about draining public pension funds of their clout.

As recent news reports explain, the driving force behind the proposed pension ban is the same crew of "anti-tax advocates, free-market enthusiasts and Wall Street interests" that is pushing President Bush's Social Security privatization plan. They include Grover Norquist, the president of Americans for Tax Reform, and Stephen Moore, president of the Free Enterprise Fund. They see the governor's proposal as "one of our highest priorities," and the governor agrees. "This is a national battle," he told reporters as he laid out his plans to collect millions of dollars from wealthy out-of-state political contributors.

Across the country, the governor's ideological soul mates are targeting public pension funds for elimination because those funds -- with the California Public Employees' Retirement System and the California State Teachers' Retirement System at the forefront -- have stood up for ordinary investors against the rampant corporate abuses.