Sal DiCiccio admits what they’re really after

31 Oct 2013 05:25 pm
Posted by: Donna

I got the following email from Councilman Sal DiCiccio after Thursday morning’s Phoenix City Council vote on so-called “pension spiking”. Emphasis mine.

Mayor Stanton key swing vote to keep pension spiking

Mayor Stanton was the again the swing vote in a 5-4 vote to keep pension spiking by the Phoenix City Council today, proving he is the union owned Mayor.

This is the third time the Mayor has broken his promise to end pension spiking and falls right in line with his broken promise to end the food tax.

The process was gamed from the beginning. The Thursday, 10 a.m. special meeting start time, limiting the public participation, the proposal passed is one of the least defensible in court, the last minute discovery that local pension boards will have to act on the council’s action, and even the Mayor himself acknowledged most the changes will require going back through negotiations, the same process that created the problem we are in today.

By recommitting to the same process we ensured the taxpayers will lose and the unions will win.

The motion approved also stopped any analysis of other options. Not only is there no cost/savings analysis for the proposal that moved forward but no other alternatives were analyzed so the Council and taxpayers had a clear decision on what would save the most money.

Bottom line: Unions won today and taxpayers lost. The only real solution will be to support the citizen driven imitative that will move Phoenix to a 401(K) and stop the pension spiking.

That last line there tells you this is not about pension spiking. What’s really going on is that public pensions are a big pile of money set aside to be paid to *gasp* middle class public workers in their retirement years. Naturally, rich people are having a big old sad over that boatload of cash not going to its proper owners, i.e. them. Wall Street has already succeeded in convincing much of the private sector to hand their retirement plans over to stockbrokers so they can rake in billions in fees and gamble with working people’s savings. They haven’t had as much luck with the public plans but they are still gunning for them, aided by ambitious reactionary politicians like Sal DiCiccio. (Of course, the really big prize is Social Security.)

Unfortunately, it is rather easy to gin up resentment against public pensions (and if you’re someone like Laurie Roberts of the AZ Republic, milk it for several columns) because of the aforementioned looting of private pensions. Most private sector workers have crappy defined contribution plans, if they have anything at all, and their wages have stagnated or taken a hit in the past decade or so. Why should those city workers get such a nice retirement if I’m not going to get one? And then there are the comfortably affluent folks who make up at least a plurality of DiCiccio’s district. Attacking public workers appeals to their straight up disdain for working class people. Win-win.

But any satisfaction to be derived from sticking it to those “overpaid” city workers with their too-generous benefit packages will soon be overridden by the sheer economic calamity that would be caused by diminishing or destroying public pensions. As Darwin Bond-Granham explains:

Consider what would happen now if the pension hawks were to get their way and dramatically scale back the retirement benefits that state and local governments have promised their employees. The crisis of declining incomes for the majority of Americans would dramatically worsen. Millions would endure real pay cuts and in turn reduce their household budgets, and the economic system would choke.

According to the US Census’s survey of pensions, there are about 19.4 million public employees who are members of a public employee retirement system. About 8.6 million of these individuals are currently drawing benefits from the 3,400 state and local pension funds of all fifty states, and thousands of counties and cities.

Each month these pension systems pump $60 billion into the US economy in the form of retirement checks cut to their former employees, and also in the form of early withdrawals. These millions of pensioners spend the majority of this cash on consumer goods, healthcare, housing, food, and travel. It’s a total economic stimulus of about $230 billion a year – almost a quarter trillion in income for the middle class to expend.

The geographic distribution of US public pension funds ensures that these dollars are circulated widely in every region of the nation. Retirees in California, New York, Texas, and Florida obviously expend enormous shares of the total flow of pension income. There are over a million retired California public employees collecting and spending their pensions today, but even tiny Wyoming counts 22,000 pensioners on its rolls. As labor scholar Katherine Sciacchitano has written, “far from just supporting retirees, defined-benefit pensions contribute to economic recovery by providing a long-term, stable source of counter-cyclical spending—spending that continues even during economic downturns.

Public employee pensions are a key source of income for millions of middle class Americans who sustain a big slice of the US economy simply by spending their retirement checks each month. If pension hawks are successful in Detroit, San Jose, and elsewhere, if the attack on pensions translates into a successful dismantling of this part of the American social contract, then it’s likely that the share of income flowing to the bottom 90 percent of the nation would collapse even further. The result would be even more severe economic inequality. Over the long-term, and combined with other causes of income inequality, it would mean economic stagnation, and perhaps even lead to a deflationary spiral.”

It’s the kind of basic arithmetic that is seemingly incomprehensible to people like DiCiccio and the brain trust over at the Goldwater Institute. But make no mistake: if these greedy hucksters get their hands on public workers’ safety net (and dog forbid, Social Security) it is game over for the middle class and the US economy.


  1. Pingback by Sal DiCiccio admits what they’re really after - on October 31, 2013 5:55 pm

    […] Donna I got the following email from Councilman Sal DiCiccio after Thursday morning’s Phoenix City […]

  2. Comment by Fred Sotelo on November 1, 2013 9:15 pm

    As a 17 year Phx Fireman and son of a retired 34 year Phx Fire Capt, and after reading just TWO of your blog posts, I have to say THANK YOU! I think I’m in love!

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