“But believe it or not you won’t find it so hot if you ain’t got the do re mi”
For translation:paste pg.URL into window after clickPUBLIC WORKERS AND PRIVATE WORKERS UNITE!
ORGANIZE THE UNORGANIZED! JOBS WITH UNION BENEFITS FOR ALL!
HANDS OFF SOCIAL SECURITY! DEFEND AND EXPAND MEDICARE!
HANDS OFF DEFINED PENSION PLANS!
President Barack Obama, doing his part to impose the bosses’ austerity plan, on Friday April, 5, proposed to cut social security and Medicare benefits in an unprecedented historic deal with the Republicans. While this single component of the austerity plan targets elderly and those dependent on social security, these actions are aimed at the entire working class. This long-term attack on the solvency of workers’ retirement comes in many forms. While Republicans salivate over their dream of privatizing social security, the Democratic Governor of California Jerry Brown has led the drive to cut public workers’ pension benefits and even advocated privatization, as part of his 12 point plan. The attack on Social Security and on defined pension plans are an attempt to liberate the billions held in these plans to allow the individual worker investor to be fleeced of her/his retirement by the sharks on Wall St. Brown insisted the workers must take on the risk of the market! The global crisis of capitalism is exploding the dreams of the commodity traders as Wall St. teeters on the brink of an abyss of fictitious capital imploding beneath the dysfunctionality of the anarchy of production—the ‘free market.’
Public workers of California and the multi-million Californian working class are bludgeoned with the austerity at many levels. Cut backs in social services, furloughs of public workers for three years, increased medical insurance contributions compound wage cuts and job losses; working families suffer from record levels of home foreclosures, spiraling public education tuition costs and declining educational resources overall.
California, according to the International Monetary Fund’s list of U.S. States and world countries by Gross Domestic Product, is the 8th largest economy in the world, excluding the United States as a whole, or 9th, or eight behind the USA.
As a result, the system which provides public services to this massive population is enormous, providing wages for and related benefits to 1.5 million public workers and their families. So when workers around the country are hit with fiscal troubles, the effect in CA is reverberated tenfold, like a socioeconomic earthquake that jostles every corner of the economy. And like during a real earthquake, some are just jostled and shaken and others fail under the effect.
California’s own fiscal woes
The public pension programs which serve the public employees is equally sizable and complicated. CA has 3 large public retirement systems, one for teachers (CalSTRS), one for the university system (UCRP), and one for other public employees (CalPERS). In addition, there are 24 other independent county or city retirement systems throughout the state. CalPERS is the largest.
Although not a lucrative proposition, CA public workers are investing their entire retirement package in retirement fund futures, and being told that just tweaking the system here and there will ensure their retirement base. What they are not told is that capitalism does not work; it ebbs and flows only to benefit the people who can absorb and speculate on its fluctuations. For most, whose paychecks fund this retirement system, capitalism’s crisis-ridden nature is concretely reflected in the burgeoning everyday reality of an underfunded retirement systems, thanks to a series of catastrophic blunders and miscalculations. The elected CALPERS leadership believed the “boiler room” hype and forited the public workers’ future to the big banksters. The losses sustained by buying into the real estate bubble only compounded the effect of the previous under funding by the state during bull market years. In the last contract the Union leaders gave away additional worker contributions to the pension fund to make up for losses in the market (losses for the workers but not for the banksters!) Public worker union leaders encouraged the membership to “Share the Pain,” rushing to help make the workers pay for the capitalists’ crisis.
On 2/21/2013, State Controller John Chiang released a new report showing the unfunded actuarial accrued liability of providing health and dental benefits for state retirees is projected to be $63.84 billion over 30 years (which is only about 2 billion a year–less than Schwarzenegger gave away reducing the new vehicle registration fee) :
“The current pay-as-we-go model of funding retiree health benefits is short-sighted and a recipe for undermining the fiscal health of future generations of Californians,…However, today’s challenge won’t necessarily become tomorrow’s crisis if policymakers can muster the fiscal discipline to invest now so that we can pay tens of billions of dollars less later.
“Recognizing that fully funding the health and dental benefits obligation is unlikely given the State’s tight budget, Controller Chiang noted that even incremental steps toward pre-funding the obligation would significantly reduce the State’s liability (see attached chart ). For example, if the State pre-funded just 10 percent of its obligation, it would only need to pay $170 million more than its current pay-as-you-go contribution. However, that additional payment would shave $2.74 billion off of the State’s unfunded liability.
“Pre-funding 25% of its obligations would cost the State $420 million more than the pay-as-you-go contribution, but would reduce the total unfunded liability by $6.63 billion. In addition to cutting costs by prefunding the obligation, Chiang said the State should continue to be aggressive in its efforts to contain health care costs by promoting prevention and wellness and innovations in health care delivery. “Improving the health of state employees will not only lead to a more productive workforce, but also to substantial taxpayer savings”
Of course, another solution would be to seize the retirement systems and operate them under 100% workers control, rather than letting political interests’ and cronies’ policy take us to the breaking point. The current model is not sustainable. Nor is the economic system it is based on. Even democratic workers control of the pension system would be no guarantee of a sustainable model as long as the pension fund is trapped inside the unraveling capitalist system.
In spite of the Dow Jones recent share price recovery the markets are in fact in a bear market on the precipice of an abyss. Workers need a fully-funded system with guarantees and not one influenced by the peaks and valleys of stock prices and their manipulations by speculators and gamblers. There are over 100 billionaires in the State of CA. There is no reason public workers should fund the capitalist class’ excesses by pouring money from our pension funds into their stock market Ponzi scheme. As pensions are nothing more than deferred wages, we demand our employers guarantee and fully fund pensions for all. We must link this demand to the fight for jobs for all a full union benefits. When the bosses say, they “can’t do that” we say, “what are you good for?” “Get-outta-here-ya-bum!”
In his February, 2013 monthly report, State Controller Chiang covered California’s cash balance, receipts and disbursements of January, 2013. Total revenues for the first month of the calendar year were $4.3 billion above (39.1 percent) estimates found in the Governor’s proposed 2013-14 State budget! Personal and corporate income taxes exceeded projections 45–55%, whereas sales tax revenues fell below estimated projections by 27%.
“Last month’s revenues were by far the highest…seen in any January for the past decade. Along with increased auto sales, rising home values, and more construction, it signals that California may be entering an era where we can govern outside of crisis,” Chiang said. “However, given our state’s troubled history with boom-or-bust revenue cycles, this good news must be tempered with increased fiscal discipline in how we interpret and budget January’s collections.”
What Chang is actually saying is, ‘I work for the bourgeoisie and no matter how much tax revenue we collect were still her kick the workers in the ass as a they head into contract negotiations.’ What Chiang failed to mention was that the vast increase can be attributed to the unprecedented profits collected by the wealthy and corporations. Sales tax receipts, which were less than expected, represent the purchasing power of the entire state, including all the furloughed, laid off, homeless and unemployed whose purchasing power has dramatically declined, as well as the consumption of the wealthiest sectors, whose share of the economy has increased.
According to real news.com (4/5/2013), the number of worlds number of billionaires has increased by 210 since their last count. The nominal 1,426 billionaires in the world is explained as an undercount, given that billionaires have professionals hiding their assets. In the US alone, last year saw an all time record 800 billion dollars in increased profits among the aggregate wealth of very wealthy, whereas your average worker cannot garner any economic performance at all on any of their meager holdings.
In fact CA has been dubbed “the billionaire capitol of the world” with over 100 identified billionaires, as of January, 2013. This is up from previous year’s reports of 80–90 of them. So yes, Mr. Chiang, with Proposition 30, the state has seen a vast increase in individual and corporate tax revenues, because the wealthiest people and corporations in the country are sweeping up every centime of cash there is to be had, earned or gotten by other means. But let there be no mistake, these increased tax revenues have nothing to do with working people except that it was our, ability to produce profit for the bosses that enriched the wealthy in the first place, and do not reflect an increase in workers’ fiscal well-being.
Failed stimulus programs such as the CA’s Enterprise Zone (EZ) corporate tax break program were designed, in theory, to create new jobs. But in practice, corporations are exploiting the program to enrich themselves instead. The EZ program, which incentivizes companies to close up shop, fire all their workers and relocate to another part of the state, is costing CA $700 million a year, and has resulted in few, if any, net new jobs created. (CLF newsletter 4/5/2013). With the super rich overseeing the super rich why should any of these programs succeed, ever? Corporate incentive programs do not work because the only incentive corporations respond to is their bottom line and that of their shareholders’, while they rob localities of tax revenue.
Additionally, according to the CA Budget Task Force, CA has the largest number of Medicaid enrollees, 7.5 million, and, among six study states, has the highest percentage of its population enrolled in Medicaid, 29 percent. But CA’s annual spending per enrollee, $3,364, is the lowest among the six study states and well below the national average of $5,337, and its Medicaid spending as a percent of state General Fund spending is below the national average. Still, Medicaid spending has grown at 6 percent per annum since 2006. So with fewer jobs, growing costs and less revenue in the State, the federal cuts are just salt on the already gaping wound.
Impact of the sequestration and related proposed deficit solutions
With the sequestration and the most recent attacks on social security and Medicare, President Obama is forcing the working class to yet again stoically bear the burden of diminished access to jobs, education, health care and retirement benefits. All the while expecting their voter loyalty to his party!!
Obama’s “nice guy” pose doesn’t fool anyone who knows the Republicans will never agree to raise taxes on themselves and their golf buddies. Obama’s approach shows his actual class allegiances.
“…this is rotten public policy, and all those political reasons pale in comparison to the damage he is doing here. With the demise or curtailment of most pensions, the drop in family wealth due to the collapse of the housing sector in 2008, the big unemployment numbers cutting into many families’ life savings, the flattening or decrease of wages for most workers, and the inflation in many essentials among those who are working driving down the ability to save for retirement, this is the absolute last time we should be looking at cutting incomes for retirees.” (Common Dreams 4/5/2013)
On his own initiative he has offered to link future social benefit increases to the chained Consumer Price Index (CPI)–read bogus purchase price index! The Chained CPI is the worst of all his attacks, as it disproportionately affects the elderly. The proposal is to reduce the adjustment for inflation, a cost of living allowance he is skewing. Thus he robs the social security beneficiaries something, not even Bush could get away with. He is a Thatcherite wet dream. The justification that people tend to buy lower priced items when their income is reduced by inflation or by any other means is vintage Thatcher. But there is no cheaper or generic version of health care and profits require that patients’ costs are rising more rapidly than inflation.
The McKesson Corp., based in San Francisco, distributes wholesale medicines, medical supplies, and computer systems for doctors. The head of McKesson, Mr. John Hammergren, earned last year $131 million dollars, according to Ralph Nader in WSJ 4/16. “That is the equivalent of about $63,000 an hour, or $10,000 more than the annual median household income in the U.S. Meanwhile, some of this country’s lowest-paid workers-those on minimum wage-made just $15,080 annually at $7.25 an hour. Mr. Hammergren had surpassed that amount by 9:15 a.m. on his first workday of the year.”
Mr. Hammergran is the highest paid CEO in the U.S. The McKesson Corp. will substantially benefit from Obamacare. Maybe Mr. Hammergren can ask for a raise….(Earl Gilman reports on April 16, 2013)
Your average senior citizen lives in poverty, and has a median income of $20,000. 70% of many senior incomes are derived from Social Security. 20 – 40% of all senior expenses are for health care. So when Obama reduces the inflation adjustment index for these folks, assuming they are purchasing lower cost items, this leaves seniors out of luck and resources to cover their living expenses. Isn’t this out of whack! Obama’s plan compounds the short fall for seniors right when banks are offering record low interest on savings accounts and CD’s. This negative compounding of future cost of living adjustments will over the coming decades defund social security in real terms, driving millions more into homelessness and poverty during their “golden years.” He is tightening the screws to force the entire nation to play the stock market no matter the cost in human life.
Furthermore, this places the burden, directly and most often, on their working class children. Their children have sustained massive cuts to their base resources and support services via the joblessness, the austerity and sustained furloughs and service cuts in the past few years. Again, with such an enormous population, California has felt the effects of every national policy decision like a knife cutting its throat, while the political parties are unwilling to make the 100 billionaires and thousands of multi- millionaires of the state pay. Where we part company with the reformist tax the rich schemes like Prop 30 is that we really do intend to take the wealth from the malefactors and put it entirely under the control of the workers and the oppressed. Who will do this? The bourgeois parties never will. We need a workers government that rests upon the power of the workers state. To think that appropriating the necessary funds can be accomplished otherwise is cruel delusion that we will expose. Trade union leaderships who mount pathetic campaigns that are so cynical and so obviously designed to fall flat never will enforce any ‘equal pain’ on the ruling rich. Neither will a whole host of self styled socialist “revolutionists” who toady up to the official leaderships and pedal reformist versions of the same tax the rich campaign.
With all the hype about the potential dramatic and sweeping effects of the sequestration, it has now been reduced to a beltway political argument for many commentators. They make much too flip a judgment and too soon. According to the Huffington Post (4/6/2013), its effects will be real and lasting for years to come, especially for working Americans:
“Organizations and companies have begun laying off workers, while many more have decided not to staff vacant positions. Schools on military bases are contemplating four-day weekly schedules. Food pantries have closed, as have centers that provide health services. Farmers have been forced to go without milk production information, causing alarm in the dairy industry and the potential of higher milk prices. Workers at missile-testing fields are facing job losses. Federal courts have closed on Fridays. Public Broadcasting transmitters have been shut down. Even luxury cruises are feeling the pinch, with passengers forced to wait hours before debarking because of delays at Customs and Immigration. Yes, sequestration is creating the possibility of another poop cruise. On the national level, sequestration may be defined by canceled White House tours and long lines at airports that never materialized. But on the local level, it is beginning to sting.”
Every geographic area of the country has been affected, and with a big impact on health care delivery and education, and particularly programs targeting low income and needy individuals and families. (See pg. 1 Defend the SEATS program Johnson County.)
“Of the more than $2.5 trillion to date in projected 10-year budget savings, nearly 80 percent would result from spending cuts. The rest would derive from tax increases on high incomes that became law on Jan. 1, in the tax agreement that the two parties reached at year-end when the efforts for a broader deficit-reduction deal collapsed. Mr. Obama’s proposals to reduce deficits $1.8 trillion more over a decade track his offer to Mr. Boehner, adjusted for the roughly $600 billion in higher taxes that became law in January. He will propose more than $600 billion in new revenues — his last offer had called for $1.2 trillion in taxes — mostly by limiting to 28 percent the deductions that individuals in higher tax brackets can claim. Congress has ignored that idea in past years.
“Deficits would be reduced another $930 billion through 2023 as a result of spending cuts and other cost-saving changes to domestic programs, and $200 billion more due to reduced interest payments on the federal debt. Mr. Obama’s proposed spending reductions include about $400 billion from health programs and $200 billion from other areas, including farm subsidies, federal employee retirement programs, the Postal Service and the unemployment compensation system. In Medicare, the savings would mostly come from payments to health care providers, including hospitals and pharmaceutical companies, but Mr. Obama also proposes that higher-income beneficiaries pay more for coverage.” (New York Times, 4/5/2013).
The direct impact of sequestration on California represents a “mere” $12 billion in federal revenue for the State (Reality Check 2/27/2013). But look at the specifics: It’s millions in cuts to education, both primary and secondary and head start programs, cuts to education for kids with disabilities, cuts in funding for environmental protection, and cuts to the military/defense infrastructure. If you parse these program cuts, they are mostly benefits to working families and low income households. And because California has such a large pool of public employees, many of them will be deeply affected by these cuts. Paylines are removed. Attrition heaps out of job classification work on the retained employees.
Impact of progressive budget cuts on California’s system of Higher Education
In a report by the nonprofit Public Policy Institute of California, the impact of $1.5 billion in state budget cuts between 2007 and 2012 on California Community Colleges, the nation’s largest system of higher education, was documented in searing detail. (Sacramento Bee 3/26/2013)
“During that period, enrollment within the 112-campus system dropped from 2.9 million to 2.4 million students,…. The enrollment declines were steepest among students returning to school after an absence and first-time college students,…. Enrollment of first-time students fell 5 percent even as the number of high school graduates in California rose 9 percent. ‘The decline in access of first-time students is troubling, given California’s longstanding need to increase college-going rates for new high school graduates, who are the workforce for the future,’ said PPIC researcher Sarah Bohn, the report’s co-author.”
“California’s community college system, which is known for its low fees and open-access policies, is open to nearly all adults, but in recent years campuses have been forced to turn away hundreds of thousands of students who couldn’t get into the classes they wanted. Across the system, the number of academic-year course offerings dropped 21 percent, summer classes fell 60 percent and class sizes swelled, researchers said. All types of courses were cut, but the drop was most significant for non-credit courses for enrichment or remediation.”
California’s public university system has long been the envy of other states and has a worldwide reputation for high quality education. Repeated budget cuts have reduced what it can offer and has damaged this reputation in perpetuity. Private corporations pretend to shower largess on the California’s Universities. In reality they get research department graduate student slaves to do basic science for them on the public dime. Does the public hold the paper on the resulting patents and intellectual property? It does not! Graduate students need an organizing offensive and the backing of the mobilized California workers movement to defeat the privatization drive and the cuts to research grants imposed by the austerity whether by Brown’s budget or Obama’s sequestration. Then we have another scam is the kind perpetrated by California Regent and investment banker Mr. Richard Blum (or should we say Mr. Feinstein) also know as good old fashioned graft.
All these cuts to education, affect the working class disproportionately, after they have already been furloughed, laid off and told that their children will have to start going to school 4 days a week. And they have been spoon-fed the dream that increasing taxes on the rich (the recent prop 30) will solve the chronic economic problems of the state, as those same rich folks made unprecedented financial gains in the last year. So now workers kids get a lousy primary education, get poor healthcare and little access to higher education. The community college system has traditionally been a point of access to higher education for those who could not afford a state college or university, and are now likely to receive little or no unemployment or retirement benefits if they actually can find a job!
State Workers attacked doubly in this model
In November, 2012, with the support of labor, California Democrats picked up a supermajority in both houses of the state Legislature, a surprise outcome that gives their party the ability to unilaterally raise taxes and leaves Republicans essentially irrelevant in Sacramento. This is the first time in 80 years that one party controlled 2/3rds of both houses.
When combined with the passage of Proposition 30, the governor’s budget-balancing tax measure, the results offer lawmakers “a great opportunity to begin a new chapter in California,” according to Senate President pro tem Steinberg. He called a supermajority “a tremendous responsibility,” and one that is “humbling to have.” “California is back on track…we have come through this very tough period. When I started the deficit was $42 billion,” he said. “Now we’ve made the awful cuts, and the voters have given us not only the tools to say no more cuts, but also to begin to focus on some positive agendas … It will be very different to govern without a constant crisis.” (SF Gate 11/7/2012) The pomposity of these boasts and the conceit is flabbergasting.
So ostensibly this gave the Democrats the power to do all the right things for the State, right? Of course California is still buckling under years of fiscal mismanagement, the burden of prop 13, a giant and endless tax shelter for land-rich corporations and the controversial ballot initiative process, which is, well, controversial.
A recent Associated Press article states “2011: Democratic Gov. Jerry Brown completes contract negotiations with all remaining state employee unions, requiring workers to pay a greater share of their pension cost. In October, Brown proposes a 12-point pension plan that would raise the retirement age to 67 for new employees who are not public safety workers and require state and local employees to pay more toward their retirement and health care. He is seeking to place future retirees into a “hybrid” system that blends pensions with a 401(k)-style plan. He seeks to end so-called pension “spiking” that lets employees boost their payouts by including overtime and other benefits, and end the practice of buying additional service credits”. What the Associated Press did not tell you is that you have to be a member of the salaried managerial elite or the armed thugs of the state to spike your pension. These costs are loaded on working families while the pay freeze, hiring freeze and furloughs continued. Missing from the who the what the when and the why in the Associated press article are the tens of thousands of contract employees whose on the job responsibilities are equal in every way to those of unionized state workers but whose compensation packages correspond to the moth eaten pay envelopes of the independent at will contractors. They may sometimes make the equivalent in cash wages but they never get vested in defined benefit pension programs or medical retirement benefits. The contracting adds another layer of administrative duplication and siphoning off of funds to reward contracting firms (read political favorites) in an ongoing anti-union drive to privatize government functions.
Additionally, Brown’s pension reform act for CalPERS specifies an employee contribution increase of 1 – 1.5%, puts a cap on the amount of compensation that can count towards retirement benefits, denies felons their pension benefits, and further limits post-retirement reemployment.
So California public employees and their bank accounts are being attacked by federal and state policy makers, being blindsided by their ineffective unions and put on the chopping block again and again, all the while being required to show up and keep the entire state from crumbling into utter chaos and pandemonium. California state workers need to fight back and take back control of our unions to make them properly work on our behalf, with accountability and recallability of all elected officers, with fiscal transparency and class political independence. The unions need to fight austerity by revealing all State and business secretes. We say open the books, the reality of tax loopholes and give-aways to corporate and wealthy interests are only the surface manifestations of a government by and for the 1% and their corrupted servants. State workers need to build action committees and class struggle caucuses if they are to unite all public workers and begin to win the conditions, benefits and compensation we all deserve. Workers! We need our own political party, a fighting labor party not beholden to the interest of any other social class, but a tribune of all the people that fights for a government of the workers and the oppressed!
HANDS OFF SOCIAL SECURITY! DEFEND AND EXPAND MEDICARE!
No more budget cuts on the backs of the elderly, the students or public workers!
No chained CPI reductions!
Provide universal health care coverage, socialize medicine!
Nationalize the insurance companies, Big Pharma and the for-profit medical corporations, without reimbursement to the big shareholders and run 100% under workers control. Put private insurance companies out of the medical industry.
Demand a fully-funded retirement system for all. Put private business out of the pension business!
Defend Public education. Reinstate all funding to higher education and make higher education free for all! Reorganize the education system under parent, teacher, student & school worker control.
Reinstate funding to head start, arts, sports music, science education.
Fully fund nutritious student diets and provide on site medical resources.
Cops out of schools!
Initiate action committees at all work sites and schools!
Build inter union organizing committees! Unite private and public sector workers against the austerity and for workers power!
Rebuild the unions! Defeat Taft Hartley and other anti-union legislation.
Initiate class struggle caucuses inside our unions to fight uncompromisingly for the political independence of the working class and for our own political party and program!
Create Jobs for all!
Pay 40 hour wages for 30 hours of work so everyone can have both a job and a living, at union wages and benefits! Allocate billions for public works not one cent for imperialist military adventures.
For a sliding scale of wages and prices set by worker run price committees.
Say no to compromising the real needs of the masses for the frivolous wants of the wealthy few!
For public workers unions to survive they must break from the Democrats and take the lead in reviving the labor movement by embracing workers in the private sector and taking the lead in organizing the unorganized. Both the contract workers in public works and workers in private industry must be organized to win union wages and benefits for all! Public workers can win when we make real the slogan:
“An Injury to one is and injury to all.”
