It doesn’t matter what happens in these next few days. If this new pension deal, released Tuesday with little in the way of hard financial numbers or projections, falls apart. Or if it lives. Or if labor sues or files a referendum. Or because it will be undermined by future collective bargaining, or by any ballot initiative that conservative forces may file in the weeks or months ahead.
None of this matters because we already know the verdict:
Pension reform is dead.
Pension reform isn’t dead because this bill won’t do much to fix the system or limit future obligations. And it isn’t because of public employee union power or Democratic politics or the legitimate desire for retirement security. Yes, those things make it hard, but every major policy has interests that oppose it. Pension reform is no different.
No, pension reform is dead because any policy that’s big, ambitious, and difficult is dead.
Try to think of something big the legislature has done.
You’re right–nothing. Halfway big? You’re maybe tempted to say high-speed rail. Well, they approved money for a first leg. Don’t hold your breath waiting for the actual high-speed rail connection between LA and San Francisco to be built. Lawsuits. Politics. Lack of funds. We’ll see pension reform first, and pension reform, like General Franco, is still dead.
Why are all the big things dead?
One is the utterly broken governing system in California. Majorities of Californians know we need to do big things: in schools, transportation, prisons, health care, etc. But we can’t. Because the system makes it impossible to do anything big. It’s not the American checks and balances that are the problem. It’s California’s peculiar system where nothing fits together. We have three systems, not one in fact: a majoritarian election system, a consensus-based legislative system (requiring supermajorities on financial matters), and the world’s most inflexible initiative process. No place with those three systems could get anything big done.
The second reason is related to the first. Our system – really our weird mix of those three systems — is so messed up and so confusing that it’s made it hard for us to understand our problems. We think very peculiarly and very narrowly about things, because we’re always looking for some small path through the big mess of government to a solution.
Pensions are a good example of narrow thinking. Because when people talk about pension reform, they aren’t really talking about pensions. They’re talking about the massive costs of pensions, and the obligations they create, and how those obligations can crowd out more important spending or force tax increases.
The real problem they should be talking about is much bigger: excessive employee compensation. California governments, particularly local governments, provide way too much in compensation to many employees, particularly those in law enforcement. The problem is not how to fix one piece of that compensation – pensions, which are deferred compensation – but how to reduce that compensation. Because it’s possible to “reform pensions” as San Diego voters just did, and not reduce compensation because of pay raises. (Yes, citizens of America’s Finest City – you’ve been had).
So it’s probably a good thing that this legislative session will end either without a pension bill – or with a pension bill that doesn’t reform much of anything. If the folks who are worried about employee compensation know what’s good for them, they shouldn’t complain. They should celebrate this moment as the end of pension reform. Because it’s an opportunity to stop fighting the narrow battle, and fight the real fight: on employee compensation.
Of course, if they want to win a battle that big, they’ll have to support a redesign of California’s broken governing system first.
So repeat after me: Pension Reform Is Dead! Long Live Pension Reform!