If you’re a taxpayer from a well-run state with low public worker union pension debt, you may be watching in horrified fascination as House Speaker Nancy Pelosi pushes the political buttons for the new CARES Act 2 federal coronavirus relief bill.
People and businesses need help. Government shut down the economy to deal with the pandemic. There are serious coronavirus costs and federal help is needed.
But what’s worrisome is this: Politics could morph necessary relief into a massive, no-strings-attached bailout for Illinois, New York, New Jersey and other poorly run states to pay down their unfunded public worker pension debts.
And who pays? You do.
It’s like watching your grandma take your college fund to pay off her brother’s gambling debts.
Democratic governors such as J.B. Pritzker of Illinois and Andrew Cuomo of New York are putting on the pressure, saying if that federal pipeline doesn’t start flowing again it will prove the Republicans and President Donald Trump just don’t care about human suffering.
It all reminds me of a guy who knew a lot about politics and human nature: Paul Ricca, the boss of bosses of organized crime in America.
Ricca was ruthless — a killer. He detested publicity, flew under the radar. Hollywood never made a movie about him. He was brilliant, educated in a seminary and is said to have spoken several languages.
From the time he came to Chicago to watch over Al Capone — the publicity seeking buffoon fronted off to the public and the press as the beclowned mob boss — and until he took his last breath, Ricca’s word was law. From New York to Los Angeles to Las Vegas and, naturally, Chicago.
Legend has it that one day Ricca was being driven along Cermak Road, named to honor a Chicago mayor who died suddenly of lead poisoning, when someone in the car began complaining about another gangster.
The guy in Ricca’s car wanted the other gangster to die a slow painful death from cancer.
“Stop. That’s a terrible thing for you to say, that he should get cancer,” Ricca said. “Cancer? How could you say such a thing? You wish that kind of suffering on someone? That’s terrible.”
The other guy in the car was terrified, thinking he’d angered the boss. Ricca was silent for a moment, then asked:
“Do you really hate this man?”
“Then don’t wish him to have cancer. Wish him to be a gambler,” the boss said. “It takes longer.”
And Ricca smiled.
How long has it taken for suffering taxpayers in Illinois and the other poorly run states to drown in red ink from massive unfunded public pension debt liabilities?
The Democratic governors have their talking points. This isn’t a bailout, they say. Instead, it’s all about “fairness” and “donor states.”
“As you know, we are a donor state to the federal government,” Pritzker said the other day. “We pay more in federal taxes in Illinois than we get back from the federal government. The states who are being bailed out, year after year, are the states who take more out of the federal dole than they put in.”
The Democratic talking points sound reasonable, until you realize the states Pritzker says are being “bailed out, year after year,” are, in the main, extremely poor states, with many poor people who need federal assistance programs.
And the new talking points ignore something else: the structural political issues that have led several states to mortgage their taxpayers’ futures and seek a federal bailout.
A bailout, a no-strings-attached grant of billions in federal cash, is like giving money to a desperate gambler. Or like putting cash into the hands of a meth addict.
Long before the coronavirus pandemic gave Democrats a crisis they could use to do things they’d never done before, states such as Illinois, New York, New Jersey, Connecticut and even Kentucky were in the grips of something else that was killing them.
The political class in each of these states, mostly Democrats but with help from a few local Republican handmaidens, had put taxpayers on the hook for unsustainable public pension deals for government workers.
Rather than fund the pensions, the politicians just kicked the can down the road for the next political crew to deal with. And they kicked it too.
Years ago, as handing out political patronage jobs was deemed illegal, the old local Democratic political organizations began to fade. The politicians needed new armies with muscle at election time. The public worker union bosses stepped in and thus began the destructive symbiotic relationship.
The political class overpromised on pension deals. The public worker unions got the Democrats elected. In states such as New York and Illinois, some politicians leveraged public office for great private wealth. And who paid? Taxpayers.
Now in Illinois, the unfunded public worker pension debt is estimated in the hundreds of billions of dollars. The state’s bond ratings are just above junk status. Illinois state Senate President Don Harmon has asked Congress for a $41.6 billion bailout.
Taxpayers are on the hook and the pension burden shifts to property taxes. The property taxes rise and home values fall. Taxpayers are now the servants of public servants.
Coronavirus didn’t do this. Trump didn’t do this. Local politicians did this.
So why should taxpayers of well-run and prudent states be asked to bail out the politicians of Illinois and elsewhere for decades worth of bad decisionmaking?
The politicians and mouthpieces will prattle on about “fairness” and “donor states.” But they’re very much like bust-out gamblers. They want someone else to pay their debts.
And the bill is due.
Paul Ricca understood them well.