Big Labor's Lies: Richard Trumka's Bald-Faced Falsehoods on Wisconsin's Budget Stalemate

The transcript's here, from PBS NewsHour last night, "AFL-CIO's Trumka: No American Should Face Choice Between Rights, Job." But it has to be seen to be believed. In a response to Judy Woodruff's questioning, Trumka issues a series of categorical falsehoods regarding the budget negotiations and political situation in Madison:

Here's the key passage, from the transcript:

JUDY WOODRUFF: You know, Rich Trumka, the way he and other governors frame this, though, is they're saying, this is an argument between all of the citizens of the state, in this case Wisconsin, versus the public workers. And he said, when it comes down to that balance, public workers should be willing to give some.

RICHARD TRUMKA: Well, you know, they have been.

He asked for cuts, and they agreed to all the cuts that he asked for. Remember this. Those public employees are citizens as well. This is a concerted campaign by a number of Republican governors to vilify public employees.

They first -- this governor, Walker, first said that Wisconsin employees are paid too much. Well, now we know from study after study that the public employees are paid less than private employees. And then he said it's about the pension plan. And then we find out that his pension plan is nearly fully funded, 100 percent of assets versus liabilities.

And then he says, well, I need these cuts. And they agreed to them. And then, again, the most outrageous thing that he did was say that to these employees, I'm going to lay you off unless you give up your rights.

Now, no American should be subject to that. We ought to be doing more to build the middle-class, not less. And what he's trying to do is take away nurses, firefighters, EMTs, snow plow drivers, their ability to come together to make their way into the middle class.

Now, debunking Trumka's claims one-by-one.

First, Trumka claims Gov. Walker is unwilling to negotiate on the budget, but according to a Wednesday report from Reuters, "Wisconsin governor says open to budget negotiation":

Wisconsin's Republican Gov. Scott Walker said on Wednesday his proposed two-year budget was open to negotiation, but only if absent Senate Democrats end a two-week standoff over a bill that reduces the powers of public sector unions.

Senate Democrats left Wisconsin on February 17 to avoid a vote on Walker's proposals to eliminate collective bargaining for most public sector workers and require annual votes of workers for the unions to exist.

Frankly, it's the fleebaggers who've refused to negotiate, and have become a laughingstock throughout the deadlock.

Second is Trumka's dishonest response on Wisconsin's public sector compensation. The state's workers make more than those in the private sector, and to evade the point Trumka suggests that "we know from study after study that the public employees are paid less than private employees." But according to a Tuesday report from USA Today, "Wisconsin one of 41 states where public workers earn more":

Wisconsin is one of 41 states where public employees earn higher average pay and benefits than private workers in the same state, a USA TODAY analysis finds. Still, the compensation of Wisconsin's government workers ranks below the national average for non-federal public employees and has increased only slightly since 2000.

So again, Gov. Walker's right about union pay relative to Wisconsin's private sector compensation.

And on the state's public pension system, Trumka claims that public workers' pensions are "nearly" fully funded but neglects to mention that the state pensions are 100-percent tax-payer funded and that current projections show they'll be unable to make expected payouts to retirees. See, "Public worker retirement system sputters with market":

By most accounts Wisconsin has one of the best public worker retirement plans in the country. Established in 1951, it has grown into the nation’s 9th largest public pension fund and the 29th largest pension fund of any kind in the world. Nearly 560,000 current and past public employees are covered — everyone except Milwaukee city and county workers, who have their own pension fund.

The WRS offers a variety of payout options for retirees under a complex set of calculations. But basically, public employees in Wisconsin can retire with full benefits at age 57 after 30 years of service. Protective services employees like firefighters or police can retire at age 53 after 25 years on the job.

The goal, according to Dave Stella, secretary of the Department of Employee Trust Funds, is to replace 75 to 80 percent of income in retirement through a combination of a state pension, Social Security and personal savings. The average payout for WRS participants is roughly $1,900 per month.

“The system has served the state well,” says Stella. “You’ve got to give some credit to the Legislature for setting it up like it did.”

Taxpayers in Wisconsin currently cover virtually all pension plan contributions for employees, a benefit gained through contract negotiations that workers say makes up for lower pay in the public sector.

All told, taxpayers across 1,469 units of government paid an estimated $700 million in 2009 to meet required retirement contributions for their public workers. That figure, which is recalculated each June, is expected to climb as the state spreads investment losses from the pension over the next several years.

But a faltering stock market has put pressure on pension plans to meet their investment targets. Recent reports estimate public pensions nationwide are underfunded to the tune of $1 trillion, although Wisconsin is considered one of the best funded.

If the stock market does not begin to produce better results, the state could be left with three difficult choices:

• Future retirees could be forced to accept reduced payments.

• Governments, or their employees, could have to increase their contributions.

• Retirement ages for active employees could be pushed back, although not for those who’ve already reached their retirement age and are still working.

“Any of the above would be outlets for bad news,” says Keith Bozarth, executive director of the State of Wisconsin Investment Board, which manages the pension fund.

Given that analysis, it's easy to see why Big Labor Thug Richard Trumka is reduced to lies and distortions. Gov. Walker's plan eliminates collective bargaining over pensions because state worker plans are not only bankrupting the state, but have created a public-sector aristocracy with many state workers able to retire at phenomenal benefit levels while in their 50s. This is the nation's public sector crisis in a nutshell. Union benefits and power are too costly and harmful to state interests, so progressive thugs resort to lies to defend them. As Daniel DiSalvo has indicated, "Showdown in Madison":

Traditional democratic theory holds that elected officials, carrying out the will of the people as expressed in competitive elections, should determine public priorities and how public policy is carried out. But if elected officials must bargain with unelected ones—the representatives of permanent government employees—to get anything done, voters turn over decision-making power to people whom elections cannot hold accountable.

Furthermore, public-sector unions reduce government effectiveness. Collective bargaining over working conditions makes government more rigid and rule-bound. It limits the discretion of elected officials, reducing innovation and experimentation. Government unionism also has a ratcheting effect on salaries and benefits, causing them to increase in ways largely detached from broader economic conditions. The result is long-term structural debt, which crowds out spending on other priorities.