Welcome, Allies Against Outsized Government Class Privileges

The lead editorial in yesterday's Lansing State Journal called for ending post-retirement health care benefits to state retirees of working age: "It's time for the state to stop subsidizing health benefits for former workers who are still of working age . . . In the private sector at least, the clear trend is that if people under age 65 want subsidized health insurance, they should expect to be full-time employees."

For some time I have been making the same point in articles and speeches. I've pointed out that there's not enough money in the world to pay these benefits — the LSJ cites a Pew Center report showing some $8 billion would be required — and also that these aren't really contractual obligations, like pensions appear to be.

The editorial references state Rep. Mark Meadows, D-East Lansing, on this second point — a Democrat who represents a district with a large proportion of government employees: "He sees no constitutional barrier to changes to retiree health benefits."

This is progress. This is moving beyond the fruitless and misguided discussions happening elsewhere on "how to fund" these non-obligations. Such "funding" would require a massive wealth transfer from struggling private workers and businesses to sitting-pretty government employees and retirees. Given that reality, one might even characterize such "funding" discussions as scandalous.

Examples of such discussions are bills that have passed the House and are poised to advance in the Senate, to allow local governments to load millions of dollars of new government debt onto taxpayers to pay for the same non-obligations to privileged members of the government class at the local level.

These bills would not require a vote of the people to impose the new debt - most likely because the politicians have a pretty good idea of what would happen if there were a vote. I have written about the legislation and votes in the following posts on this blog:

Kabuki Dance: Mortgaging Taxpayers for Government Retiree Benefits

'Obligation' Legislation Burdens Taxpayers for Nonobligations

Taxpayer Debt to Pay Government Retiree Health Benefits

The issue also is addressed in this February Viewpoint, titled "Pension Obligation Bonds: Borrowing Our way to Prosperity?"

Here are the state politicians supporting and sponsoring this massive wealth transfer:

Roll call vote details on House version, HB 4075 here.

SB 927 sponsored by Republicans Mark Jansen, Bill Hardiman, and Roger Kahn.

Senate Appropriations Committee roll call vote:

Republicans voting in favor: Jelinek, Pappageorge, Hardiman, Kahn, Cropsey, George, Jansen, Brown, McManus, Stamas.

Republicans voting against: None.

Democrats voting in favor: Barcia and Cherry.

Democrats voting against: Switalski, Anderson, Brater, Clark-Coleman and Scott.  

(Note: Those Democratic "no" votes in the Senate Appropriations Committee are likely the first steps of the Kabuki dance described in my blog on this.)

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