Biden cuts off funds to spite state’s pension reform
Then on Thursday the House of Representatives censured loony GOP congressman Paul Gosar for circulating “a manipulated video on his social media accounts depicting himself killing Representative Alexandria Ocasio-Cortez and attacking … Biden.” It’s quite the circus.
Yet arguably the week’s most-enjoyable D.C. story involves a bureaucratic interpretation of an arcane federal statute and its intersection with a 2013 California law. It’s a chuckle-inducing dispute once you delve into the complex backstory — and look at the unhinged reactions of California officials who are being hoisted on their own union-built petard.
We just learned that the U.S. Department of Labor has denied California $12 billion in transit funding, including grants from the recently signed infrastructure bill. The reason? A 1964 federal law requires the labor department to certify that the state agencies seeking any mass-transit grants are “protecting the interests of any affected employees,” the Fresno Bee reported.
So, the Biden administration is claiming that California — the state that provides its public employees with unparalleled pay and pension benefits, and provides collective-bargaining rights unheard of anywhere else — is being mean to its “affected” public employees because the state passed a 2013 law, authored by Democrats, that infinitesimally reined in pension benefits.
As SFist summarized, “Biden is withholding giant amounts of federal money from California public transit because the state’s public-employee pension system is apparently not paying people enough.” Labor-allied California politicians — facing a reduction in funds for beloved transit programs — are so angry they’re almost sounding sensible. You see why I’m laughing?
For instance, Gov. Gavin Newsom penned an artfully written letter on Nov. 10 to Labor Secretary Marty Walsh blasting the funding cut off. In it, he laments that the department’s grant-denial decision “is a complete reversal of (the agency’s) final determination in 2019 that California’s statewide pension reform legislation … ‘does not present a bar to certification.’”
The labor-friendly governor is furious at the labor-friendly Biden administration for adopting a labor-friendly position. Adding to my delight, Newsom favorably cites the previous administration, which, as noted, determined that the pension law does not harm state workers. Yes, Newsom is citing a Trump appointee to overturn his Biden-administration replacement.
It gets better. Pension-reform critic Newsom makes a powerful argument defending the 2013 pension-reform law, known as the Public Employees’ Pension Reform Act: “After multiple years of litigation, the reviewing federal court found in California’s favor three times, and the department did not pursue appeals. The department’s own lawyers noted that the federal court’s decisions were ‘thoroughly reasoned’ … That should conclude the matter.”
As a refresher, Gov. Jerry Brown led the charge for PEPRA. The state was facing budget shortfalls and pension costs were obliterating local budgets (they still are, actually). It pared back some of the most generous pension formulas for new hires and eliminated pension-spiking schemes such as “air time,” which allowed public employees to buy future retirement credits for pennies on the dollar.
The law in no way impaired collective-bargaining rights. In fact, the main purpose of PEPRA was political. It helped Brown convince the public that he was serious about reforming the budget process – and PEPRA’s passage softened up voters enough to pass the Proposition 30 tax hike.
Any perusal of Transparent California will show the eye-popping compensation packages that California public employees still receive. No other governor or Legislature hands out such lush benefits to public employees — and yet the Biden administration is punishing California for a Democratic-sponsored law that imposed only the slightest restraint.
In an act of hubris, some California public-employee unions sued over PEPRA — and claimed the rollback of pension-spiking gimmicks violated the California Rule. There is no actual rule, but a series of court interpretations concluded that governments cannot reduce pensions going forward unless they provide something of equal value.
Admirably, Brown defended PEPRA in court — and made a broader argument for rolling back that blasted California Rule, which prevents cities from limiting overly generous pension formulas that are obliterating their budgets.
Brown pointed to a lower-court ruling that said that public employees have the right to a reasonable pension — “not an immutable entitlement to the most optional formula of calculating the pension.” The California Supreme Court upheld the pension-reform law, but punted on the California Rule. That should indeed be the end of the matter, but the feds still are smarting over any effort to reform pensions.
I’m not bemoaning the potential loss of transit funds given they tilt heavily toward climate-change folderol. It is funny, however, watching California Democrats get tripped up by their own union allies.
Image credit: stasenso