The Illinois legislature has granted the City of Chicago a reprieve:
Chicago won some relief from its pension burden as Illinois’s legislature cut required payments into police and fire retirement systems. Yet lawmakers failed to agree on a budget, deepening a crisis that threatens the state and city alike.
The Senate voted 38 to 20 Sunday for a bill that would reduce Chicago’s payments over the next five years in a move meant to relieve immediate pressure, though it doesn’t address the city’s risk of insolvency from $20 billion in unfunded liabilities.
Note that the move isn’t a permanent solution, doesn’t put Chicago’s public pensions on a sounder footing, or mean that Chicago won’t also need to hike property taxes. It just kicks the can down the road a bit. Whether it will do anything to remove the Damoclean sword in the form of payments to banks due to the city’s low credit rating remains to be seen.
Also unknown is whether Gov. Rauner will sign the bill into law. He might prefer to use it as leverage to get something of what he wants out of the state legislature (read: Mike Madigan). He actually doesn’t have a lot of leverage. Democrats have a veto-proof majority in the legislature and Mssrs. Madigan and Cullerton can get pretty much anything they care to passed.
I don’t think it should. By kicking the can down the road they’ve actually made things a little bit worse.
Democrats have a veto-proof majority in the legislature and Mssrs. Madigan and Cullerton can get pretty much anything they care to passed.The question would be whether or not they want political cover by getting the Republican Governor to sign on. I take it from your portrayals that they probably don’t give a shit?
1. You’d be surprised, ice, at the bright line distinction in brinksmanship finance between payment default and no payment default. The can shall continue to be kicked.
2. They don’t give a shit. They will ultimately blame the callous Republican governor, call for more taxes on the rich as the solution, and invoke the heroism of fireman and the goodness of educators. Always seems to work.
I know that this point seems tangential to yours, but does your sentence mean either:
1) Madigan (age 73) and Cullerton (68) don’t care about passing pension reform? I don’t think so, since both could conceivably be alive and for more than long enough for the stuff to really hit the fan, and you’d think Madigan would want to leave the state in a condition better than utter ruin in light of his daughter’s ambitions.
2) They do care but have no idea how to do it and get re-elected? Possibly, but frankly I think both could come out supporting bills against apple pie, Lincoln on the penny, labor unions, teachers, moms and kids and still have enough of a machine to get re-elected.
3) Despite some amount of time and effort, they haven’t been able to come up with a plan that’s constitutional, would save enough money to be worthwhile, and wouldn’t cause enough defections to either see the bill fail, or leave them in a weakened-enough state politically that they’d be vulnerable in the future?
I’m thinking it’s more 3. Democrats, especially, are vulnerable to anything that touches public pensions, making them politically unable to get anything done. I almost wonder if they wished that Rauner won in a landslide with long enough coat tails to keep them out of supermajorities, so they could “play nice” and get something passed with Republicans, only to run against it in the future.
Here’s what I meant, Tim. I have no idea what they do or do not want or what they believe or do not believe. However, if both of them want a piece of legislation passed, that’s what’s going to be passed. Beyond that you can put any construction on events you care to.
If I had to speculate, I’d guess they think that they can solve Illinois’s problems solely by increasing marginal tax rates and their objective is to minimize budget cuts or structural reforms and maximize tax increases, in the assumption that they won’t get pushback from their own voters on that.